India’s equity markets have fallen to 7th position globally in terms of market capitalisation, as a combination of heavy foreign selling, weak earnings growth, falling valuations, and limited exposure to AI-driven stocks impacted performance. Meanwhile, rapid gains in tech-driven markets like South Korea and Taiwan pushed them ahead, highlighting structural gaps in India’s market composition.
Key Highlights
Ranking Shift:
- India slipped to 7th place globally in market capitalisation
- Faces risk of falling further to 9th position, with Canada close behind
South Korea Overtakes India:
- South Korean markets (KOSPI, KOSDAQ, KONEX) reached $5.01–$5.04 trillion
- India’s market cap declined to around $4.84–$4.85 trillion
- Surge driven by AI-chip companies
Taiwan Ahead of India:
- Taiwan’s market cap: $4.95 trillion
- India’s market cap (earlier comparison): $4.92 trillion
- Taiwan overtook India to claim 5th position
Sharp Reversal in Trend:
- Around 18 months ago, India’s market cap was: 3.5 times that of South Korea and Twice that of Taiwan
- Indicates significant relative decline in competitiveness
Reasons Behind India’s Decline
- Weak Earnings Growth – Lower investor confidence
- Heavy Foreign Institutional Investor (FII) Selling – Capital outflows
- Limited Exposure to AI Sector – Missing global tech rally
- Falling Valuations & Sliding Rupee – Reduced attractiveness
- Weak Listings Pipeline – Fewer high-value tech companies
Global AI Factor Driving Other Markets
Markets in Taiwan and South Korea surged due to dominance in AI semiconductor ecosystem, led by:
- TSMC (Taiwan)
- Samsung Electronics
- SK Hynix
These firms are key players in AI chip manufacturing, attracting global investor interest and boosting market capitalisation.
Indian Market Snapshot
- Despite broader weakness, domestic sentiment showed resilience: BSE Sensex rose 0.5% and Closed 383 points higher at 74,650
- Positive triggers: Improved geopolitical sentiment (West Asia) and Falling crude oil prices