India is now Asia's hottest market for global investors: Survey
What's the story
Fund managers have shown renewed interest in the Indian stock market, according to a recent Bank of America (BofA) survey.
The shift comes after the world's fastest growing major economy had briefly lost its position as the most favored Asian market.
As per the survey, India's equity market is now ranked above Japan, China, and Singapore in terms of preference among fund managers.
Market preference
India emerges as the top choice for fund managers
In the survey by BofA, 42% of fund managers preferred India over other regional markets.
India is ahead of Japan (39%), China (6%), and Singapore (3%).
The survey report said, "India emerges as the most favored market, perceived as a likely beneficiary of supply chain realignments following the effects of tariffs."
Market comparison
Japan's stock performance lags behind India's
Though Japan is the second-largest Asian market after China, it has been beaten by India this year.
The Nifty50 benchmark has risen 4% since January, while Japan's Nikkei 225 index has fallen 4.4% in the same period.
The difference in performance only further emphasizes India's growing attractiveness among fund managers.
As per IMF, India is also poised to surpass Japan as the world's fourth-largest economy this year.
Investment focus
Fund managers eye infrastructure, consumption sectors in India
The survey also found that fund managers are keeping a close watch on two major sectors in India: infrastructure and consumption.
These sectors have become the top investment themes for these finance professionals.
The emphasis on sectors highlights the tactical approach fund managers are adopting toward investing in India's equity market.
Sector sentiment
Shift in fund managers' sentiment toward semiconductors
The survey also observed a change in fund managers' sentiment toward semiconductors.
The percentage of participants anticipating a downturn in the semiconductor cycle has fallen to 42%, compared to 59% last month.
This shift indicates a growing optimism regarding the semiconductor industry's future among fund managers, further highlighting their strategic focus on sector-specific investments.