In a significant shift within global financial markets, South Korea’s stock market has surpassed India’s to secure the position of the world’s sixth-largest equity market by value. This development marks a notable change, particularly as India recently dropped to seventh after being overtaken by Taiwan, which moved into the fifth position last week.
The momentum in South Korea’s equity market is chiefly attributed to a remarkable surge in its semiconductor industry, significantly buoyed by the global artificial intelligence boom. Recent data from Bloomberg indicates that the total market value of companies on South Korea’s exchanges has surged by 86% this year, reaching an impressive $5 trillion. In contrast, India’s market capitalisation has declined to approximately $4.8 trillion.
Key contributors to South Korea’s stock market rally include industry giants Samsung Electronics and SK Hynix, both of which have recently achieved valuations in excess of $1 trillion. Their pioneering work in AI memory-chip technology has not only fueled their financial growth but has also pushed the Kospi index to gains of over 100% in 2026. In this wave of growth, South Korea has managed to surpass several well-established markets, including Canada, Germany, the UK, and France.
Ross McGarry, a Senior Investment Analyst at Asset Value Investors, emphasized that this development signifies a notable achievement for South Korea, which had previously regarded reaching the Kospi 5,000 level as an ambitious long-term objective. However, he cautioned that this rally heavily stems from the semiconductor sector, with Samsung and SK Hynix accounting for a considerable portion of the gains. The sustainability of South Korea’s market resurgence, he suggested, will largely depend on the implementation of broader corporate governance reforms.
Meanwhile, India has encountered several challenges that have hindered its market performance. A weakening rupee, ongoing foreign investor withdrawals, and a relatively limited presence of companies linked directly to AI infrastructure have contributed to its decline. Notwithstanding the drop in stock market rankings, India continues to boast a larger economy, with the International Monetary Fund estimating its gross domestic product at $4.15 trillion, compared to South Korea’s GDP of $1.93 trillion. Moreover, India remains among the fastest-growing major economies globally, despite recent setbacks in the equity market.
The recent movements also highlight Taiwan’s ascent, attributed mainly to the exceptional rise of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chipmaker. This shift has solidified Taiwan’s position as the fifth-largest stock market globally, trailing only the United States, China, Japan, and Hong Kong. TSMC now constitutes around 42% of Taiwan’s benchmark index, illustrating the concentrated influence that a single company can have on a national market. With TSMC shares having surged 46% so far this year, largely driven by robust investor interest in artificial intelligence, the ongoing rally signifies how economies engaged in advanced chip production are benefiting significantly from the AI-driven tech boom.
As the stock market dynamics evolve, stakeholders will be closely monitoring the implications for both South Korea and India within the context of global economic trends and the increasing significance of the semiconductor industry amid the technological advancements.
