South Korea’s equity market has overtaken India to become the sixth largest market in the world. The main reason for this is the tremendous rise in the shares of big chip manufacturing companies, which are accelerating the development of Artificial Intelligence (AI) across the world. Earlier, Taiwan had shifted the Indian market from 5th position to 6th position. It was then that it seemed that soon South Korea’s market would leave India behind and come at number 6. The reason behind this is not only chip and AI stocks but also the increasing investment of foreign investors, who are leaving India and investing in the markets of Taiwan and South Korea.
Kospi becomes the 6th largest market in the world
According to data compiled by Bloomberg, the total market capitalization of companies listed on the Korean stock exchange has increased by 86 percent this year to $ 5 trillion, while India’s market capitalization has declined to $ 4.8 trillion. Samsung Electronics Co. and SK Hynix Inc. — which recently joined the $1 trillion valuation club — has largely driven the surge in Korea’s equity market. On the basis of their strong hold in the sector of AI memory chips, these companies have increased the estimated profit of Kospi index till 2026 to the level of more than 100 percent. This year, Korea has left behind countries like Canada, Germany, Britain and France.
left India behind like this
Ross McGarry, senior investment analyst at Asset Value Investors, said in a Bloomberg report that getting close to India is a huge achievement, especially for a market which until recently had set an ambitious target of touching the Kospi 5,000 level. He further said that, however, the main credit for the market boom this year goes to the ‘memory cycle’. The main work of taking this whole boom forward has been done by companies like Samsung and SK Hynix. The real test now is whether the Korean market can sustain its elevated valuations (re-rating) over the long term, based on genuine reforms in corporate governance.
Why is India’s market lagging behind?
On the other hand, India’s market has lagged behind due to a weakening rupee, record outflows by foreign investors, and a lack of companies directly involved in AI infrastructure. Korea may have overtaken India in terms of market value, but India’s $4.15 trillion economy—one of the world’s fastest growing, according to International Monetary Fund estimates—is still much larger than Seoul’s $1.93 trillion GDP economy.
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