South Korea Overtakes India in Global Market Capitalization Rankings

Asian Markets in Flux: South Korea Surpasses India in Global Market Capitalisation Rankings

India's stock markets have slipped to seventh place in global market capitalisation rankings, following South Korea's edging past, the second Asian market to do so in as many weeks. As of June 1, South Korea's market capitalisation stood at $5.04 trillion, surpassing India's $4.84 trillion. Taiwan, which overtook India last week, stands at $5.15 trillion, ranked fifth globally, with South Korea at sixth.

The recent moves reflect a dramatic divergence in fortune across Asian markets. South Korea's benchmark KOSPI has surged over 110 percent year-to-date in 2026, while Taiwan has gained over 65 percent, making them the best-performing major markets globally. This rally is rooted in an AI and semiconductor boom, with TSMC, Samsung, and SK Hynix reporting massive earnings growth. Semiconductors and high-bandwidth memory — the critical components powering AI data centres — account for nearly 60 percent of market capitalisation in both markets, cementing South Korea and Taiwan at the centre of the global AI value chain.

India, by contrast, has had a punishing run. The Sensex and Nifty have fallen 12 percent and 15 percent respectively so far in 2026, with underperformance stretching back to late September 2024 amid stretched valuations, subdued earnings, and relentless foreign investor selling. The pain has deepened more recently as the global trade war, a lack of AI-linked stocks, currency depreciation, and the US-Iran-Israel conflict combined to drive crude oil above $100 per barrel, fanning inflation and straining India's trade balance.

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The path to recovery looks uncertain. The West Asia conflict shows no signs of abating, while the India Meteorological Department's forecast of 90 percent of normal monsoon rainfall risks compounding inflationary pressures. Rising crude oil and commodity prices are also emerging as a direct threat to corporate earnings, with analysts warning that higher input costs, supply chain disruptions, and weak pricing power could weigh on profitability through the fiscal year. Crisil, Ambit Capital, and Franklin Templeton India Mutual Fund have all recently flagged growing margin pressure across sectors as companies struggle to pass on rising costs.