Taiwan’s stock market has left India behind in terms of total valuation (market capitalization). The reason for this surge in Taiwan is the tremendous increase in the shares of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chip maker. According to Bloomberg data, Taiwan’s market capitalization has increased to $4.95 trillion (approximately ₹ 411 lakh crore). In comparison, the total valuation of the Indian stock market has increased to $4.92 trillion (as of market close on Monday). With this change, Taiwan has now become the fifth largest stock exchange in the world after the US, China, Japan and Hong Kong.
**How did Taiwan get the lead?**
The entire credit for taking Taiwan’s stock market up in the global rankings goes to chip manufacturing company TSMC.
TSMC alone accounts for about 42% of Taiwan’s benchmark index, showing its tremendous dominance in the market.
The company’s shares have seen a huge rise of 49% this year, due to the increasing global demand for Artificial Intelligence (AI). In the field of AI chips (semiconductor), the company has an unmatched dominance in the global market.
This surge in Taiwan’s market cap reflects its heavy reliance on tech hardware – a sector that is at the center of the AI investment cycle right now. Markets where tech hardware companies don’t have a strong presence are lagging behind markets like Taiwan and South Korea.
**5 reasons due to which India lagged behind**
Despite several domestic forces, the Indian stock market has been under pressure this year. Several factors have emerged to explain this trend.
Global investors are pulling capital out of relatively expensive markets like India and redeploying it to markets like Taiwan and South Korea, where they can bet directly on AI and semiconductor themes. This year, foreign institutional investors (FIIs) have sold assets worth about $24 billion.
Rising crude oil and energy prices due to geopolitical tensions between Iran and the US have raised concerns about India’s growth rate and inflation.
The Indian stock market’s benchmark index has fallen nearly 8% this year, its first annual decline after a decade of consecutive gains. As a result, India’s share in the MSCI Emerging Markets Index has declined to about 12% from 19% last year.
**India is far ahead in economic matters**
Taiwan may have taken the lead in the stock market valuation race, but when it comes to the real economy, India is much larger. According to International Monetary Fund (IMF) estimates, India’s $4.15 trillion economy is several times larger than Taiwan’s $977 billion GDP.