After Taiwan, South Korea Overtakes India As World's Sixth Largest Stock Market

South Korea has surpassed India to become the world’s sixth-largest equity market, supported by a sharp rally in semiconductor stocks fuelled by the global artificial intelligence (AI) boom.

The total market capitalisation of listed companies in South Korea has jumped around 86 per cent so far this year to nearly $5 trillion. On the other hand, India’s market value has eased to about $4.84 trillion over the same period, according to Bloomberg data.

A major driver of South Korea’s surge has been its large technology exporters, particularly firms deeply embedded in the global chip supply chain. Samsung Electronics and SK Hynix, both of which have recently crossed the $1 trillion valuation mark, have led the advance, benefiting from strong global demand linked to AI infrastructure and advanced memory chips. This concentrated rally has pushed the Korean benchmark index to gains of over 100 per cent in 2026.

The rapid rise has also allowed South Korea to overtake several major markets this year, including Canada and key European economies, as investor attention increasingly shifts toward countries with strong exposure to semiconductor manufacturing and AI-related technologies. Together with Taiwan, South Korea has emerged as one of the key beneficiaries of the global buildout in AI hardware.

India’s equity markets have had a relatively weak year. Persistent foreign institutional investor (FII) outflows, a weaker rupee, and concerns over inflation, partly due to higher energy prices, have all added pressure on the market.

These factors have dampened investor sentiment and led to an estimated decline of around 11 per cent in the benchmark index Nifty 50 so far this year. FIIs have also sold Indian stocks worth Rs 2.47 lakh crore, further weighing on performance.

Another reason for the gap between the two markets is sector mix. South Korea and Taiwan have a strong presence in semiconductor and AI-related companies, while India has fewer listed firms directly linked to the global AI and chip supply chain. As a result, India has not benefited as much from the recent tech-led rally.

Despite the shift in stock market rankings, India continues to maintain a significantly larger real economy. Its gross domestic product (GDP) is above $4 trillion, making it one of the fastest-growing major economies in the world, while South Korea’s economy is estimated to be under $2 trillion, according to International Monetary Fund (IMF) data. However, India’s GDP per capita is still relatively low compared with more developed Asian economies.

The recent change in rankings is also part of a wider reshuffle in global stock markets. A few weeks ago, Taiwan had moved ahead of India to become the fifth-largest stock market, driven by a strong rally in its leading semiconductor companies.

A major chipmaker Taiwan Semiconductor Manufacturing Company (TSMC), accounts for a large share of Taiwan’s overall market value, showing how concentrated the market is and how heavily it depends on demand from AI and advanced technology sectors.