New Delhi, Aug. 14 -- The sell-off by overseas investors has extended into a second straight month in August, as concerns over US President Donald Trump's 50% tariffs on Indian imports, along with tepid June-quarter earnings by India Inc. and rich valuations, have reportedly been driving them to other emerging markets.

Investor sentiment towards India soured after Trump imposed higher duties on Indian goods while simultaneously striking trade deals with other Asian economies, including Japan, and extending the tariff suspension on China for another 90 days. These moves have led foreign investors to redirect their focus to those regions.

According to a Bank of America Corp. survey, 30% of global fund managers said they are underweight on...