Investors have turned "equal-weight" on Indian stocks according to the Morgan Stanley semi-annual survey of 95 institutional investors.
The investment bank says only 21 per cent of the investors are "overweight" on India versus 39 per cent in February, the lowest since it began this survey, while only one-third believe that India will beat emerging markets in the next 12 months.
On average, investors expect the BSE Sensex to be at 20,949 in the next 12 months, almost flat versus current levels.
The BSE Sensex is expected to be at 20,286 by the end of the year and at 22,200 by the end of 2014, according to a Reuters poll last week.
Morgan Stanley notes its survey shows a very split view on financial shares, which is selected as both the likely best performing sector and the worst. The investment bank is "underweight" on banks in its model portfolio.
Also, almost half the surveyed cited the next general elections as the most important factor for India's performance.
Mid-cap shares followed by AAA-corporate bonds are the preferred asset classes, as per the survey.