INSUBCONTINENT EXCLUSIVE:
India's stock market has fallen to the fourth place among Asia Pacific's most favoured investment destinations as the Nifty remains trapped
in a bruising two-month consolidation with no rescue in sight, according to the latest Bank of America (BofA) survey that signals a shift in
fund manager sentiment.The stunning reversal marks a sharp departure from India's previous position as a regional favourite, with Japan now
commanding the top spot "by a distance," followed by Taiwan and South Korea, while India languishes in fourth place as investors flee to
semiconductor-driven rallies elsewhere.The BofA survey reveals only 10% of fund managers are now overweight on India, a stark contrast to
the 32% backing Japan, 19% supporting Taiwan, and 16% favouring South Korea
The data exposes India's vulnerability in the near term as it struggles with a lack of positive catalysts while regional rivals capitalise
on the resurgent semiconductor cycle."Both Taiwan and Korea are benefiting from the resurgent semiconductor cycle, while Korea gains
additional upside from hopes surrounding its new leadership's policy reforms," BofA noted in the survey, highlighting the specific drivers
propelling India's competitors ahead.The survey delivered particularly brutal news for India's once-mighty IT services sector, which has
fallen "out of favour" as BofA's India IT services indicator crashed to a 20-month low
This sector-specific weakness adds to the broader malaise gripping Indian markets.
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VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, painted a bleak picture: "There are no triggers for the market to
break out of the consolidation range in which it has been stuck for two months now
Even an India-US interim trade deal has been discounted by the market, leaving no scope for a sharp rally decisively breaking the
range."Vijayakumar identified one potential catalyst that could shock the market higher: "One positive and surprise factor that can trigger
a rally is a tariff rate much below 20%, say 15%, which the market has not discounted
So, watch out for developments on the trade and tariff front."The strategist delivered mixed signals on key sectors, warning that "Results
of the IT sector continue to disappoint and, therefore, this can remain a drag on the overall market," while suggesting opportunities in
banking: "Leading private sector banks are in a defensive mode now
The market is discounting NIM compression in the Q1 results
But this will reverse from Q3 onwards, making them good buys now."Despite the ranking slide, analysts at Prabhudas Lilladher emphasized
India's ability to weather global storms: "Indian markets have shown a lot of resilience in past few months despite big events and
disruptions around global tariff wars, Israel Iran war and operation Sindoor."The brokerage noted that while "FII remains net sellers YTD,
although they have been net buyers in the past few weeks," highlighting the continuing foreign investor uncertainty plaguing the
market.Prabhudas Lilladher's analysis revealed that Indian markets are trading at a significant discount, valuing "Nifty at 2.5% discount to
15-year average PE at 18.5x with March27 EPS of 1451.5" and setting a 12-month target of 26,889, up from their previous target of
25,521.Also read: Rs 40,000 crore dividend boom! How Ambani, Adani & India's top billionaires got richer in FY25The survey showed that
within India, "investors are keen on consumption and infrastructure plays" while IT services faces sustained pressure
This sectoral rotation reflects the broader challenges facing technology stocks amid global economic uncertainties.
