South Korea Overtakes India as World's Sixth-Largest Stock Market

South Korea has overtaken India to become the world's sixth-largest stock market, with its total market capitalization reaching approximately US$5 trillion as of June 1, 2026. The surge is driven by an AI-fueled boom in semiconductor companies, specifically Samsung Electronics Co and SK Hynix Inc, both of which reached US$1 trillion valuations. The Kospi Index gained over 100% this year, surpassing a 5,000-point target set by President Lee Jae Myung, whose corporate reform agenda supported the equity rally.

India's market capitalization declined to approximately US$4.8 trillion, pushing it to seventh place. This drop follows a similar overtake by Taiwan the previous month, powered by TSMC's US$2 trillion valuation. India's decline is attributed to a weakening rupee, record foreign outflows of approximately US$26 billion, high energy costs, and a lack of companies directly linked to AI infrastructure. While South Korean equities surged, Indian benchmark indices like the Sensex and Nifty 50 fell 10-12% this year.

Despite the shift in equity markets, India's overall economy remains significantly larger than South Korea's. According to the International Monetary Fund, India's GDP stands at US$4.15 trillion compared to South Korea's US$1.93 trillion.