South Korea Surpasses India In Global Market Cap Race As Tech Rally Accelerates

India’s equity market has slipped to the seventh position among the world’s largest stock markets by value, with South Korea overtaking it after a strong surge in technology-driven stocks lifted valuations in the East Asian market.

According to Bloomberg data, the combined market capitalisation of companies listed in South Korea has climbed to about $5 trillion, exceeding India’s market value of $4.8 trillion. The latest shift comes shortly after Taiwan moved ahead of India to become the fifth-largest equity market globally.

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The rise in South Korea’s market value has been driven largely by semiconductor manufacturers benefiting from sustained investor interest in artificial intelligence-linked businesses. The country’s benchmark equity market has witnessed a significant increase in valuations this year, supported by gains in major technology companies.

Semiconductor Stocks Drive Korea’s Rise

Market capitalization of South Korea is largely attributed to semiconductor firms. Companies such as Samsung Electronics and SK Hynix have become central players in driving the rally due to the growth in demands resulting from the rise of artificial intelligence technologies.

In Taiwan, the company that accounts for much of the market’s valuation includes a technology firm such as TSMC. This has been seen as a result of the growing importance of these few technology firms amid markets with heavy weighting to the AI sector.

Equity markets focusing on technology have had impressive results worldwide in 2026. South Korea’s KOSPI index has gained 99% so far this year, while Taiwan’s benchmark index has risen 55%. In the U.S., the Nasdaq index has advanced 21% during the same period.

India Lags Global Peers

India has moved in the opposite direction as sectors linked to artificial intelligence have played a relatively smaller role in the domestic market. The Indian stock market has declined 11% so far in 2026 and is on course for its first annual loss in more than a decade.

Apart from weaker market performance, investors are also assessing the impact of higher crude oil prices on the economy. In a recent note, Kotak Institutional Equities stated that elevated oil prices could adversely affect India’s current account balance, balance of payments, fiscal position, economic growth and inflation. The brokerage’s base-case scenario assumes that tensions in West Asia ease over the coming weeks, allowing a gradual reopening of the Strait of Hormuz.

Growth And Inflation Concerns Remain

Market participants are also monitoring the potential impact of the monsoon season after the India Meteorological Department projected rainfall at 90% of the long-term average. A weaker-than-normal monsoon could influence agricultural output, inflation trends and corporate earnings.

Although earnings were fairly steady among firms during the quarter ending in March, investors have kept their eye on economic numbers, commodities, and geo-political events. These will continue to be important for market sentiment as India attempts to regain its footing amid global competition.