D-Street slips to least-favoured market status in Asia

India has been ranked as Asia's least-favored stock market in a survey conducted by Bank of America Corp., reflecting the cautious sentiment among fund managers. The lack of clear AI exposure is the primary concern for Indian equities, with weak growth emerging as the next significant risk, as per the survey, which revealed that 32% of the respondents were net underweight on the nation.

Other factors contributing to the bearish outlook include lack of reforms and high valuations. In contrast, sentiment for Indonesia has improved, with only 27% of fund managers considering it a net underweight, down from 32% in July. Taiwan and Japan continue to be the most preferred regions for investors. The survey, which included 98 panelists with $272 billion in assets, was conducted between August 7 and August 13.

Despite an improving earnings outlook, Indian stocks have declined over the past two weeks, indicating that investors remain wary of the market even as its fundamentals strengthen. Global funds have invested over $4 billion in local stocks this quarter, the highest among regional emerging markets, following record outflows in the first half of the year.

Indian stocks have jumped 8% from a recent low in March, but they remain the second-worst performing major market in Asia this year, having lost 8%.