India's stock market has slipped to the fourth position among Asia Pacific's preferred investment destinations, according to the latest Bank of America (BofA) survey cited by The Economic Times.

This marks a notable shift from its earlier leadership status, as the benchmark Nifty index remains stuck in a two-month consolidation phase with no clear breakout in sight. Japan now dominates investor interest "by a distance," followed by Taiwan and South Korea, while India ranks fourth as capital increasingly flows into semiconductor-driven markets. The BofA analysis revealed that only 10 per cent of fund managers are currently betting heavily on India- significantly lower than the 32 per cent favouring Japan, 19 per cent backing Taiwan, and 16 per cent supporting South Korea.

The findings underline India’s present vulnerability, especially as peers benefit from a revival in the semiconductor sector. “Both Taiwan and Korea are benefiting from the resurgent semiconductor cycle, while Korea gains additional upside from hopes surrounding its new leadership's policy reforms,” BofA noted, highlighting the drivers behind India's slipping position. India’s IT services sector is facing particular headwinds, with BofA’s India IT services indicator falling to a 20-month low.

This downturn adds to the broader uncertainty plaguing the domestic market. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed to the lack of catalysts keeping markets rangebound. He wa squoted by ET saying, “There are no triggers for the market to break out of the consolidation range in which it has been stuck for two months now. Even an India-US interim trade deal has been discounted by the market, leaving no scope for a sharp rally decisively breaking the range.

” However, he noted one potential upside, “One positive and surprise factor that can trigger a rally is a tariff rate much below 20 per cent, say 15 per cent, which the market has not discounted. So, watch out for developments on the trade and tariff front.”Despite the overall decline in rankings, analysts at Prabhudas Lilladher underlined the Indian market’s resilience. “Indian markets have shown a lot of resilience in past few months despite big events and disruptions around global tariff wars, Israel Iran war and operation Sindoor," he said, as quoted by ET. The brokerage firm further noted that foreign institutional investors (FIIs) remain net sellers year-to-date, though they have turned net buyers in recent weeks—an indication of lingering foreign investor caution. Within Indian equities, the survey found growing investor interest in consumption and infrastructure-related plays, even as IT services remain under pressure—mirroring global concerns around the tech sector.