India Ranked as Least-Favored Asian Stock Market in BofA Survey: Insights on Fund Managers’ Underweight Position

India’s stock market has become the least favored in Asia, overtaking Indonesia, according to a recent survey by Bank of America Corp. The survey, which included responses from 98 fund managers managing a total of $272 billion in assets, indicates a growing caution among investors regarding Indian equities. Despite a brighter earnings outlook, Indian stocks have declined over the past two weeks.

Investor sentiment towards Indonesia has improved, with the percentage of fund managers net underweight on the country dropping from 32% in July to 27%. In contrast, Taiwan and Japan remain the preferred markets for investors in the region.

Concerns Over Indian Equities

The survey identified several key concerns driving the negative sentiment towards Indian equities. The lack of clear exposure to artificial intelligence was cited as the primary issue, followed by weak economic growth. Approximately 32% of respondents reported being net underweight on India, with elevated valuations and a lack of reforms also contributing to their cautious outlook.

Despite these concerns, global investors have purchased over $4 billion worth of Indian stocks this quarter, marking the highest inflow among emerging markets in the region. This follows significant outflows during the first half of the year. Earnings for companies in the NSE Nifty 50 rose 18% year-on-year in the latest quarter, surpassing the 10% growth forecast by Motilal Oswal Financial Services Ltd.

India was last ranked as the least-preferred market in the BofA survey in May, amid rising energy costs linked to the US-Iran conflict. With energy prices climbing again and no resolution in sight, investor concerns are mounting. Although the Nifty 50 index has rebounded 8% from its March low, it remains the second-worst performing major market in Asia this year, down 8%. The index is also on track to end a decade-long streak of annual gains.

Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.

Follow Us on Twitter, Instagram, Facebook, & LinkedIn