India’s fairness market slipped to seventh place globally by market capitalisation on Tuesday, as heavy international investor promoting, weaker earnings progress, and restricted publicity to synthetic intelligence-linked shares enabled South Korea to maneuver forward.
Information from inventory exchanges confirmed that the mixed market worth of firms listed on South Korea’s KOSPI, KOSDAQ, and KONEX exchanges rose to $5.01 trillion.
That surpassed the $4.85 trillion market capitalisation of firms listed on India’s Nationwide Inventory Trade.
The shift marks one other setback for India’s fairness market, which had lengthy been thought-about a most well-liked vacation spot amongst rising market traders.
After falling behind Taiwan final month, India has now slipped two locations in world rankings inside a fortnight.
India’s lead over regional friends narrows
In accordance with Bernstein analysts Venugopal Garre and Nikhil Arela, India’s earlier benefit over regional friends has disappeared quickly.
“About 18 months in the past, India’s fairness market cap was roughly 3.5 occasions South Korea’s and greater than twice Taiwan’s. Quick ahead simply 5 months into 2026, and that lead has evaporated,” Garre and Arela mentioned in a observe.
The decline displays a tough 12 months for Indian equities.
The Nifty 50 and BSE Sensex have fallen 10.1% and 12.5%, respectively, in 2026.
In the meantime, the Nifty IT index, the second-largest sector represented within the benchmark indices, has dropped 19%.
The weak point has been attributed to a subdued earnings outlook and continued international investor promoting.
Report international outflows weigh on indian markets
International traders have withdrawn $26.4 billion from Indian equities thus far in 2026.
The determine has already surpassed the earlier annual document outflow of $18.91 billion registered in 2025.
India’s weight within the MSCI World Commonplace Index has additionally declined considerably.
Its share has fallen to 12.3% from a peak of 21% recorded in September 2024.
AI increase fuels South Korea and Taiwan
The distinction has been particularly seen in technology-focused markets.
South Korean semiconductor firms Samsung Electronics and SK Hynix have posted robust positive aspects this 12 months, serving to drive a pointy rise in South Korean equities.
The KOSPI index has climbed 107%, whereas Taiwan’s benchmark weighted index has superior 59%.
The positive aspects have been largely supported by rising investor demand for shares linked to synthetic intelligence and semiconductor manufacturing.
India, compared, has struggled to learn immediately from the AI-driven funding theme.
Market returns point out that the narrative is that “AI is the defining theme and semiconductors are at its centre and inside rising markets, that story belongs to Taiwan and Korea, not India,” Laijawala mentioned, as cited in Reuters report.
India Could profit not directly from AI growth
Regardless of the present market notion, Laijawala argued that India’s position within the AI ecosystem shouldn’t be missed.
He mentioned India affords a picks-and-shovels alternative within the AI period by investments linked to electrical energy technology, cooling techniques, bodily infrastructure, and knowledge centres that assist broader AI improvement.