Trump's 50% tariffs cause a $4 billion outflow of foreign funds, causing India to quickly drop from the top investor pick to the least preferred Asian market, according to a Bank of America poll.

According to a Bank of America Corp. poll, under US President Donald Trump's tariff escalation, India has gone from being the top Asian stock market option for fund managers to being their least liked in only three months.

30% of fund managers who responded to the most recent poll stated they were underweight on India, 20% on Thailand, and 10% on Malaysia. China came in at number two, but Japan did the best. Regional survey questions were answered by 99 panelists with $183 billion in assets.

This is a stark contrast to the May poll, which revealed that India had overtaken Japan as the most preferred market because of its reputation as a safe haven during Trump's initial tariff implementation. Trump's move to increase levies on the South Asian nation's commodities as a punishment for its imports of Russian oil has caused a shift in attitude for the $5.2 trillion equities market, which highlights mounting investor concerns.

In a letter dated August 12, strategists Ritest Samadhiya and others stated that President Trump's declaration of 50% tariffs has an impact on India. In contrast, the tone has gotten more passionate in other markets in the area, such as China.

Global funds withdrew around $4 billion from Indian equities this quarter due to trade anxiety, poor profits, and high valuations, despite a surge in buying by local institutions and individual investors. The Association of Mutual Funds in India reports that in July, the nation's stock-focused mutual funds—which are mostly funded by individual traders—generated a record 427 billion rupees ($4.9 billion) on a net basis.

However, Indian markets have underperformed their major Asian counterparts this year and recorded their worst weekly losing run since the start of the Covid-19 epidemic last week. For the first time since February, Chinese stocks beat their Indian counterparts by around eight percentage points in July.