India becomes Asia’s least-preferred stock market, replaces Indonesia
text_fields
India has replaced Indonesia as Asia’s least-preferred stock market among fund managers surveyed by Bank of America Corp.
It is signalling growing caution toward the country’s equities, which are among the region’s worst performers this year.
The survey found that 32 per cent of respondents were net underweight on Indian stocks. The lack of clear exposure to artificial intelligence emerged as the biggest concern, followed by weak economic growth. Lack of reforms and high valuations were also cited as reasons for the bearish outlook, reported Bloomberg.
By comparison, sentiment toward Indonesia improved, with 27 per cent of fund managers reporting a net underweight position, down from 32 per cent in July. Taiwan and Japan remained the most-preferred markets.
A total of 98 fund managers overseeing $272 billion in assets participated in the survey between August 7 and 13.
The findings come despite improving corporate earnings in India.
Global funds have bought more than $4 billion of Indian stocks this quarter, the highest among regional emerging markets, following record outflows in the first half of the year. Earnings of companies in the benchmark NSE Nifty 50 rose 18 per cent year-on-year in the latest three-month period, exceeding Motilal Oswal Financial Services’ 10 per cent growth estimate.
Indian stocks were last ranked Asia’s least-preferred market in the BofA survey in May, when rising energy costs following the US-Iran war weighed on growth expectations.
The Nifty 50 has gained 8 per cent from its March low but remains down 8 per cent this year, making it the second-worst performing major market in Asia. The index is on track to end a 10-year streak of annual gains.
Meanwhile, Indonesia’s benchmark Jakarta Composite Index has risen more than 20 per cent from its June low following central bank measures to stabilise the currency and easing concerns over an MSCI downgrade.