South Korea Overtakes India as World's Sixth-Largest Equity Market

MUMBAI/SEOUL — South Korea has overtaken India to become the world's sixth-largest equity market, with its total market capitalisation reaching $5 trillion, according to market data, highlighting the growing investor appetite for technology-driven Asian economies.

India's stock market capitalisation currently stands at approximately $4.8 trillion, placing it behind South Korea and Taiwan, which also crossed the $5 trillion mark last week. The development marks a significant shift in Asia's equity landscape as semiconductor-led markets continue to attract global capital.

The divergence in market performance has been stark this year. South Korean equities have surged 88% in 2026, while Taiwan's market has gained 58%, driven largely by strong earnings growth among semiconductor manufacturers benefiting from the global artificial intelligence boom.

Chipmakers in both economies have reported record financial results amid rising demand for advanced processors and data-centre infrastructure from AI companies, reinforcing investor confidence in the region's technology sector.

In contrast, Indian equities have declined around 8% since the start of the year. Market participants attribute the weakness partly to sustained foreign capital outflows and concerns over valuations after a prolonged market rally.

Foreign portfolio investors (FPIs) have withdrawn nearly $24 billion from Indian equities through May, adding pressure on benchmark indices and reducing India's relative market weight among emerging markets.

Despite the recent decline, analysts note that India remains one of the world's fastest-growing major economies, supported by strong domestic consumption, infrastructure spending and expanding manufacturing activity. However, the latest rankings underscore the growing influence of technology and semiconductor-driven growth stories in global equity markets.

The rise of South Korea and Taiwan also reflects the strategic importance of semiconductor supply chains as artificial intelligence, cloud computing and advanced electronics continue to reshape investment flows worldwide.

For India, the challenge will be to attract fresh foreign investment and sustain corporate earnings growth amid increasing competition from technology-focused Asian markets that are benefiting directly from the global AI investment cycle.