Ahmedabad: The shine of the Indian stock market seems to be fading. In a survey, India has been rated as one of the top three least favorite Asian stock markets. According to Bank of America Securities research and survey, 10 per cent of fund managers underweight Indian equities over a 12-month perspective.
Bank of America Securities said in its survey that most global fund managers expect the Japanese stock market to underperform Asian markets by 5 percent next year.
China (with a net 23 per cent of fund managers) and Thailand (13 per cent) are the only two other Asian markets where fund managers are more underweight than Indian equities in the Global Fund Manager Survey.
The patience of investors in China is once again being tested. This is because the sharp rally in September has failed to be sustained.
In the survey, Japan was considered the most preferred market among Asian markets. A total of 53 percent of fund managers were attractive to Japan. After this comes Taiwan and South Korea. The Japanese market expects double-digit returns from equities over the next 12 months. BNP Paribas Securities also expects 2025 to be a good year for the Indian equity market. He estimates that the returns of the Indian market will be in single digits in the next one year.
Other headwinds facing the Indian market are high food inflation, high US bond yields, rising dollar index and firming commodity prices, which are likely to weigh on market sentiment for most of the year.
Unless there are signs of a strong recovery in growth, demand for buying expensive equities in emerging markets will remain low. Indian stock markets are being supported by strong domestic investment inflows.
