Japan and Taiwan lead as India slips in investor preference: BofA survey

A recent Bank of America (BofA) survey reveals that India's stock market has fallen out of favour among global fund managers, ranking as the second-least preferred in the Asia-Pacific region. The survey shows that 19% of fund managers are underweight on Indian equities for the next 12 months—almost double the 10% recorded in January—reflecting a sharp shift in sentiment.
This downturn is attributed to slowing corporate earnings growth and economic weakness. Since peaking in late September, the Nifty 50 index has dropped nearly 13%, underperforming other Asian and global emerging markets. Corporate profits for Nifty 50 firms grew by just 5% in the October-December quarter, marking the third consecutive quarter of single-digit gains. Additionally, India's GDP growth for the current fiscal year is expected to decelerate to a four-year low of 6.4%.

The survey also highlights that allocations to Indian equities are at a two-year low, with only Thailand ranking lower among Asian markets. Foreign investors have withdrawn $25 billion from Indian stocks since the market’s peak, including $12.31 billion in 2025 alone.
Meanwhile, Japan remains Asia’s most preferred stock market, backed by strong economic and market performance, while Taiwan holds the second spot due to investor confidence. The survey also indicates improving sentiment toward Asia-Pacific markets (excluding Japan), with 84% of fund managers expecting regional equities to rise in the next year.
The survey collected insights from 205 panellists managing a total of $482 billion in assets, with 110 fund managers overseeing $199 billion providing perspectives on regional markets.
Market analysts predict continued challenges for Indian equities in the near term, citing weak earnings, high valuations, and economic uncertainties as key concerns.

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