New Delhi, Aug. 24 -- A potpourri of unfavourable factors has soured investor sentiment towards India. Although the MSCI India index is up 3% in the last three months, helped by lower crude oil prices, it is down 2.6% so far this year, lagging key Asian peers.

India is now the least-favoured stock market in Asia, according to the August BofA Securities fund manager survey. Weak economic growth, elevated valuations and a lack of clear artificial intelligence exposure were cited as reasons for this pessimism.

Amid the West Asia war, crude oil prices remain a swing factor. As a net oil importer, India's macroeconomic parameters-including the current account deficit, balance of payments, inflation and interest rates-are sensitive to oil pri...