Emerging market investors have become more bearish than ever, going by a global fund manager survey conducted by Merill Lynch analysts Michael Hartnett and Michael Penn.

Various sentiment indicators are at new lows and the view on Indian equities has deteriorated rapidly over the past month. While the forecast on global growth has hit a 2008 low of 61% bearish, the global and emerging-market profit expectations are near all-time lows.

Developed markets such as the US and Japan, from which fund managers had diversified in search of high growth, are back in favour.

The survey indicates that 23% of the managers polled are overweight on US equities. This US bias is the highest in seven years.

Fund managers prefer energy surplus economies such as Russia and Brazil over net importers of oil such as India and China.

The sentiment on Indian equities has dipped remarkably over the last one month. The underweight position on India has increased from 33% in May to 63% in June. On the other hand, around 84% of the global emerging market investors polled are overweight on Russia in June, as against 57% in May.

Shriram Iyer, head of research, Edelweiss Capital, says, The mood is what you see. Any chance of reversal in sentiments hinges on the chances of reversal of oil prices. Rising fiscal deficit and inflation numbers are only complicating the equation. These problems dont appear to go away in a hurry.

In this scenario, Shriram feels the short-term players among the foreign institutions have already made their exit. The longer term players continue to hold on to their India allocations. But at the same time, they are not showing any urgency to put fresh money into India, in view of the aforesaid concerns.