Emerging market investors have adopted “a modest overweight” position on Indian share markets for the first time since July 2010, according to Bank of America-Merrill Lynch’s survey of fund managers, which was out on Wednesday. However, among Asia-Pacific investors, India was among the least favoured region, alongside Australia and Philippines, according to the BofA-ML survey.

India’s BSE index rose 25.7 percent in 2012, outperforming the regional benchmark MSCI Asia Ex Japan index which rose 18.56 percent in the same period. In a separate report, BofA-ML says investors are “generally overweight” on India, based on feedback from investors in the U.K. and Europe, having added to their positions in the past six months.

However, part of that preference was driven by an “underweight” position in China. With the risk of a hard landing receding in China, and with a potential cyclical shift in the making, BofA-Merrill says, “there is a possibility of a move towards China over next few months”.

Asian shares erased modest gains to edge lower on Wednesday as cautious investors waited for more clues about the global growth outlook, while a pause in the yen’s declines spurred profit taking in Japanese equities after their recent rally.

The yen extended its gain for the second day on Wednesday after a warning about its excessive weakness by a Japanese cabinet minister while the euro also slipped after a top European official complained about its recent gains.

Oil prices dipped in heavy trading on Tuesday, weighed down by German economic data and concerns about the brewing fight over the U.S. debt ceiling stoked concerns about fuel demand.      * U.S. Treasury debt prices rose on Tuesday as traders turned their focus on a looming fight in Washington to raise the federal debt ceiling, stoking a safety bid for government debt despite the risk of a federal default.

    LOCAL MARKETS PREVIOUS CLOSE

* BSE index 19,986.82 (+0.40)
* NSE index 6,056.60 (+0.54 pct)
* Rupee 54.6150/6250 per dollar (54.4950/5050)
* 10-year bond yield 7.83 pct (7.80 pct)
* 5-year OIS rate 7.10 pct (7.12 pct)
* 1-year OIS rate 7.49 pct (7.48 pct)
* Call money 8.05/8.10 pct (8.00/8.10 pct)

Qatar Airways is not interested in buying a stake in Indian budget carrier SpiceJet Ltd or any other Indian airline, its chief executive said, quashing media reports that the Gulf carrier was in talks for a potential investment.

India’s Yes Bank Ltd is in talks to buy the local retail and commercial operations of Royal Bank of Scotland Group Plc, a source with direct knowledge of the matter said.