South Korea Overtakes India as World's 6th Largest Equity Market on AI Chip Rally

Key Facts

1India slipped to the seventh-largest equity market globally by market capitalization, as South Korea moved ahead to sixth place.

2The combined market value of South Korean exchanges rose to $5.01 trillion, surpassing the $4.85 trillion market cap of India's National Stock Exchange.

3South Korea's surge was driven by an AI chip rally, while India faced heavy foreign selling and weaker earnings growth.

Amid a significant shift in global investment flows toward advanced technology sectors, South Korea has overtaken India to become the world's sixth-largest equity market by market capitalization. According to analyst reports, the combined market value of South Korean exchanges reached $5.01 trillion, surpassing the $4.85 trillion valuation of India's National Stock Exchange. This realignment was driven by a powerful rally in AI-linked semiconductor stocks in Seoul, while Indian equities faced headwinds from aggressive foreign institutional selling and decelerating earnings growth.

The Korean surge is underpinned by the exceptional performance of semiconductor giants like SK Hynix and Samsung Electronics, with SK Hynix reporting record operating profits in early 2024 fueled by demand for High Bandwidth Memory (HBM). Conversely, the Indian market experienced significant capital flight, with foreign investors pulling out over $3 billion in May 2024 alone per market data, as valuation concerns and a pivot toward AI-centric markets reduced the relative appeal of Indian stocks.

Regarding price action, SK Hynix (000660.KS) maintained elevated levels as of the close on June 3, 2026. Traders are now shifting focus to upcoming macro catalysts, including the U.S. GDP growth rate data and the Core PCE Price Index scheduled for release on May 28, 2026, according to the economic calendar. These data points, alongside scheduled speeches from Fed officials like Williams, will be critical in determining the trajectory of foreign capital flows into emerging Asian markets.