India has emerged as the “most preferred equity market in Asia”, displacing Japan, according to the latest Bank of America Asia Fund Manager Survey. The country secured 42 per cent overweight allocation from fund managers, compared to 39 per cent for Japan. This significant lead comes amid growing global shifts in supply chains, tariff policies, and investor recalibrations post-pandemic.
What’s fuelling India’s bull case?
According to BofA, infrastructure and consumption continue to dominate investor interest. These macro themes have turned India into an investment magnet at a time when global pessimism is softening. A net 59 per cent of fund managers still expect a weak global economy, but this is a marked improvement from last month’s record-high 82 per cent.
China rebounds from rock bottom
Interestingly, China has made a dramatic comeback, jumping to the third most preferred market with a 6 per cent overweight stance — a sharp move from its earlier bottom rank. This rebound follows easing trade tensions between the US and China, which could lead some fund flows back to Chinese equities.
CLSA warns of risk to India’s ‘safe haven’ tag
Meanwhile, CLSA has flagged a risk to India’s relative outperformance. With geopolitical heat cooling and the US-China trade truce gaining ground, India’s “hiding place” advantage may fade, the brokerage said. India was the second-best performing market since March, benefiting from border tensions and global uncertainty.
Still room for upside in earnings
Though 58 per cent of fund managers still foresee earnings slowdown, it’s a notable improvement from last month’s 78 per cent. Current consensus estimates across Asia remain cautious, leaving room for upward revisions if economic momentum strengthens.
India’s moment in the sun is not just sentiment-driven — it’s supported by structural themes, relative stability, and a clearer economic roadmap. But with China back in play and macro headwinds easing, investors must now watch if the rally holds or rotates.
