Bank of America’s August fund manager survey showed India at the bottom of the Asia‑Pacific pecking order, with a net 32 per cent of respondents underweight on the market. But this has not dimmed the positive sentiment of investors.
"Global markers do not solely decide Indian market moves; look at today, for example... we are moving not just because of external reasons. Sugar stocks are doing great," said 38-year-old Ravi Krishnan, a retail investor based in Mumbai.
Simply put, this meant India was now behind Indonesia, the Philippines and China. The survey also flagged India’s limited exposure to AI, questions around growth momentum, patchy reforms, and valuations that many global investors viewed as a bit rich, relative to earnings.
The BofA survey came at a time when the headline indices struggle to keep pace with regional peers. The Sensex is down by more than 9 per cent, and the Nifty 50 slumped by roughly 8 per cent so far in 2026, making India one of Asia’s worst‑performing major markets this year.
In dollar terms, Nifty is down around 13 per cent.
Now, let's take a look at the other Asian markets. In the BofA survey, Taiwan and South Korea found comfortable spots as hosts to large parts of the global chip and hardware supply chain. They both are up by around 54 per cent in 2026, while Japan gained roughly 30 per cent.
Taiwan emerged as the most overweight market in the survey, followed by Japan and Korea. This also mirrored how strongly global funds chased semiconductor and AI hardware trade this year.
However, India’s underweight status is less about domestic earnings—which have broadly held up—and more about returns. Essentially, it is a market down high‑single‑digits in rupee terms, and double‑digits in dollar terms. Clearly, a hard sell in a year where market indices that have AI links have compounded by 30–50 per cent.
"I also feel investors chasing AI is a folly. Reports are now emerging that accuse AI of being a bubble... we are not going to take that risk in a market like India," Krishnan explained his rationale.
But for domestic investors, steady SIP flows and local institutional buying seem to be the mantra balancing out daily swings. Global investors may not see the Indian markets as overweight anymore, but local sentiment is far removed from it—even today's rally is proof of that.
