In a significant shift in global equity rankings, South Korea's stock market has overtaken India to become the world's sixth-largest equity market by value. This development comes just a week after India was surpassed by Taiwan to fall from fifth to sixth place. Within a week, India has further slipped to the seventh position.
Drivers of the Market Rally
The stock market rallies in both South Korea and Taiwan have been fueled by a powerful surge in semiconductor giants that are benefiting from the global artificial intelligence (AI) boom. According to data compiled by Bloomberg, the combined market value of companies listed in South Korea has climbed 86% this year to reach $5 trillion. In contrast, India's market capitalisation has slipped to about $4.8 trillion.
Key Players in South Korea
The sharp rise in Korean equities has been led by Samsung Electronics and SK Hynix, both of which recently crossed the $1 trillion valuation mark. Their leadership in AI memory-chip technology has helped propel the Kospi index to gains of more than 100% in 2026. South Korea has also overtaken several major markets this year, including Canada, Germany, the United Kingdom, and France.
Ross McGarry, Senior Investment Analyst at Asset Value Investors, commented that South Korea's catch-up with India marks a significant achievement for a market that until recently viewed the Kospi 5,000 level as an ambitious long-term goal. However, he noted that much of the rally has been driven by the semiconductor cycle, with Samsung and SK Hynix accounting for a large share of the gains. According to him, the sustainability of the market's re-rating will depend on whether broader corporate governance reforms can take hold.
India's Challenges
India's market, meanwhile, has faced headwinds from a weakening rupee, sustained foreign investor withdrawals, and a relatively limited presence of companies directly tied to the AI infrastructure theme. Despite the shift in stock market rankings, India remains the larger economy. International Monetary Fund estimates place India's gross domestic product at $4.15 trillion, compared with South Korea's GDP of $1.93 trillion. India also continues to rank among the fastest-growing major economies in the world.
Taiwan's Rise
Last week, Taiwan moved ahead of India in terms of stock market capitalisation, helped largely by the extraordinary rise of Taiwan Semiconductor Manufacturing Co. (TSMC), the world's biggest contract chipmaker. The latest shift placed Taiwan as the world's fifth-largest stock market, behind only the United States, China, Japan, and Hong Kong.
Much of Taiwan's rise in the global rankings can be traced to TSMC's outsized influence on the local market. The company now represents around 42% of the benchmark index, underscoring the high concentration within Taiwan's equity market. TSMC shares have surged 46% so far this year, driven by strong investor enthusiasm for artificial intelligence and the company's dominant position in semiconductor manufacturing.
Broader Implications
The rally highlights how the AI-led boom in technology stocks has disproportionately benefited economies with deep exposure to advanced chip production, particularly Taiwan and South Korea. As the global demand for AI-related technologies continues to grow, these markets are likely to remain at the forefront of equity market movements.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
