Is India the least favourite emerging market?

Emerging markets have lost flavour since the beginning of the year. Most of the Asian markets have been underperforming the developed markets but even within that pack, India has lost a lot more.

A Merrill Lynch survey shows that while fund managers are increasing their allocation to the emerging markets, India is one of their least favoured markets, reports CNBC-TV18's Anuj Singhal. Overall, fund managers are overweight on emerging markets at a plus 29% but are underweight on India at minus 47% just above Chile, which is at minus 52%. The report says that Russia, China and Indonesia are among the most favoured global emerging markets. Moreover, the survey pointed out that emerging markets are coming out of the shadow of underperformance but more monetary tightening needs to be done if they want to outperform. As per the survey, investors of emerging markets are betting big on consumer (+58%) and energy (+37%) sectors, while utilities (-68%), staples (-37%) and telcos (-26%) are among the least favored sectors. Meanwhile, India has also lost out from an Asia-pacific perspective. Among the emerging markets in this region, India is rated just a tad higher than Australia (-28%) and Philippines (-13%), while Taiwan (+16%) and China remain the favorites (+16%). However, it will be interesting to see how the India versus China trade pans out this year as last year it had worked in India