India's Stock Market Position Drops in APAC Rankings

India's stock market has fallen to the fourth spot among Asia Pacific's preferred investment destinations, as per the latest Bank of America (BofA) survey. This shift reflects a growing investor pivot towards semiconductor-driven markets, with Japan, Taiwan, and South Korea now leading the pack.

Investor Sentiment Shifts Towards Semiconductor Markets

Only 10% of fund managers are currently heavily investing in India, a stark contrast to the 32% favoring Japan, 19% backing Taiwan, and 16% supporting South Korea. The resurgence of the semiconductor cycle is driving capital towards these markets, leaving India's IT services sector, now at a 20-month low, facing significant challenges.

Potential Upsides for India's Market

Despite the downturn, analysts highlight potential triggers for a rally, such as favorable trade and tariff developments. Dr. VK Vijayakumar of Geojit Financial Services suggests that a tariff rate significantly below current expectations could surprise the market positively.

Resilience Amid Global Uncertainties

Indian markets have demonstrated resilience in the face of global disruptions, including tariff wars and geopolitical tensions. Foreign institutional investors, though cautious, have shown recent interest, signaling a possible shift in sentiment.

Growing Interest in Domestic Sectors

Within India, consumption and infrastructure-related sectors are gaining investor attention, even as the tech sector remains under pressure. This trend mirrors global concerns but also underscores the diverse opportunities within the Indian market.