India overtakes Indonesia as Asia's least favored stock market

India has displaced Indonesia to become Asia's least-preferred stock market among global investors, according to a recent Bank of America survey that tracks sentiment across the region's major bourses.

The shift reflects growing unease about India's equity market positioning relative to peers. The absence of meaningful exposure to artificial intelligence sectors represents the most significant concern for investors evaluating Indian stocks, the survey findings indicate. This gap in AI-related investment opportunities contrasts sharply with other major Asian markets that have benefited from the technology boom.

Weakening economic growth prospects have emerged as the second-most critical risk factor influencing investor decisions on Indian equities. Analysts point to a combination of structural and cyclical headwinds that have contributed to the reassessment of India's investment appeal.

The downgrade in investor sentiment marks a notable reversal for a market that has traditionally attracted substantial foreign capital inflows. The findings suggest that while India's long-term growth narrative remains intact, near-term challenges related to sectoral composition and macroeconomic momentum are weighing on allocations from international portfolio managers.