Indian Stock Market: India has replaced Indonesia as Asia’s least-preferred stock market among fund managers surveyed by Bank of America Corp. The shift shows growing caution toward Indian equities, which have been among the weakest-performing major markets in Asia this year, Bloomberg News reported.
AI exposure, weak growth worry investors
The survey found that the lack of clear exposure to artificial intelligence remains the biggest concern for Indian equities. Weak economic growth was the second-biggest risk.
About 32% of respondents were net underweight on Indian stocks. Lack of reforms and high valuations were also cited as reasons for the negative view.
Indonesia sees improved sentiment
Investor sentiment toward Indonesia improved. About 27% of fund managers were net underweight on the country, down from 32% in July.
Taiwan and Japan continued to be the most preferred markets among investors.
The survey included 98 fund managers with a combined $272 billion in assets. They responded to the survey between August 7 and August 13.
Indian stocks face pressure despite stronger earnings
The survey results come as Indian stocks have fallen over the past two weeks, despite signs of improving corporate earnings.
Global funds have bought more than $4 billion of Indian stocks this quarter, the highest amount among regional emerging markets, Bloomberg News reported. This follows record outflows during the first half of the year.
Energy prices add to investor concerns
Indian stocks were last ranked as the least-preferred market in the BofA survey in May. At the time, rising energy costs were putting pressure on economic growth after the US-Iran conflict pushed global crude oil prices higher.
With no clear progress toward resolving the conflict, energy prices are rising again, adding to concerns among investors.
Nifty remains among Asia’s worst performers
The Nifty 50 has gained about 8% from its recent low in March. However, it remains the second-worst performing major market in Asia this year, down about 8%.
The index is also on track to end its 10-year streak of annual gains.
Indonesia gains after market rally
Investor sentiment toward Indonesia has improved after the benchmark Jakarta Composite Index rose more than 20% from its June low.
