The United States remains the world’s largest stock market with a market capitalisation of $77.96 trillion, followed by China at $15.57 trillion, Japan at $8.67 trillion, Hong Kong at $7.26 trillion, Taiwan at $4.95 trillion, and India slipped to 6th place at $4.92 trillion.
The reason behind the sudden shift is that Taiwan’s largest semiconductor chip maker, Taiwan Semiconductor Manufacturing Company (TSMC), holds 42% of Taiwan’s main market index, meaning most of Taiwan’s stock market movement depends on this company.
Moreover, this year, TSMC shares also increased by 49% as the company is profiting from strong AI growth. TSMC makes advanced Semiconductor Chips that are widely used in Artificial Intelligence (AI) technologies, which is what makes this sudden shift, making TSMC a leading player in the chip industry.
While Taiwan’s Stock market is blooming, India’s stock market is falling due to:
- India’s stock market is falling due to a rise in oil prices owing to the Iran war. Since India imports a large quantity of oil from other countries, the increase in oil prices raises import costs.
- South Korea and Taiwan are the major manufacturers of Semiconductor Chips and tech products, which are widely used in the AI industry. Since the AI industry is booming, they are receiving support from strong global demand.
What led the Indian Stock Market to underperform
- Major indices like the BSE Sensex and the Nifty 50 are falling around 5%.
- FIIs (Foreign institutional investors) are pulling out money from the Indian Stock Market.
- Ongoing conflict, trade tensions, and market volatility
- Stock prices are aggressively valued or too expensive
- The company’s profit growth is too slow or weaker than expected
India’s major stock market companies do not include AI-based technologies or businesses, eliminating the benefits from the AI rally. While on the other side, due to the Iran-Israel war, the crude oil prices increased, and as India imports a hefty amount of oil, the rise in oil prices also impacts the import prices.
All of these created inflation, brought uncertainty, slowed economic growth, raised fiscal burden, leading investors to lose confidence and interest in the Indian Stock Market.
