Japan, which held the top spot until now, slips to second place, while China stages a surprise rebound, climbing to the third slot from the rock bottom in just a month. Thailand, meanwhile, holds its title — albeit an unwelcome one — as the least favored market in Asia.
The survey shows India has 42% of fund managers being overweight, Japan has 39% overweight, while China has just 6% overweight stance.
“Infrastructure and consumption continue to be the primary themes that investors are keenly monitoring,” BofA noted, underlining the two big macro levers powering India’s market magnetism.
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The survey results slice through months of investor anxiety and show the first signs of thawing global pessimism. While a net 59% of respondents still expect a weaker global economy, that figure marks a major improvement from last month’s bleakest-ever 82%. The Asian outlook is warming up too, with 77% anticipating weakness, compared to 89% previously.
And the earnings gloom? It’s still here, but lifting.
A net 58% of fund managers foresee an earnings slowdown, down from a grim 78% a month ago. Meanwhile, consensus earnings estimates across Asia aren’t flashing red. Instead, they’re staying cautious, leaving room for upward revisions if economic momentum improves.The BofA survey comes after CLSA said India’s safe haven status is at risk amid easing trade tensions between the U.S. and China and improving regional geopolitics.
CLSA noted that India had become a relative outperformer and a “hiding place” for investors in the wake of heightened global trade tensions and India-Pakistan border conflicts. “The rise in these fears made India a hiding place and second-best performing market since March,” the brokerage said.
However, with a China-U.S. deal now reducing fears of a trade war, the brokerage cautioned that “it may reduce the relative attractiveness in India,” CLSA said, reflecting the risk of relative underperformance if flows begin rotating back into Chinese equities.
