New Delhi, Dec. 22 -- India has regained favour among global investors, now rated mildly overweight in Bank of America's Asia Fund Manager Survey (FMS), while Japan leads in the region and China drops to an underweight rating.

This development highlights the role of Indian markets as a diversification option compared to AI-heavy North Asian markets, supported by a "Goldilocks" environment of rising global growth and low inflation expectations across Asia, excluding Japan.

India has "slowly climbed back to mild overweight, likely serving as a diversification play against AI-driven markets," the report said.

Currently, 10% of fund managers are net overweight on India, up from 0% in November, becoming the third most preferred market in As...