After briefly , India has once again become the world’s fifth-largest stock market by market capitalisation.
The comeback, however, has come as much from India’s resilience as from a sharp correction in two of Profit booking in technology and semiconductor stocks has dragged both markets below the $5 trillion mark, allowing India to reclaim its position.
India’s total market capitalisation now stands at around $5.05 trillion, ahead of Taiwan’s $4.97 trillion and South Korea’s $4.66 trillion. The United States continues to lead the rankings, followed by China, Japan and Hong Kong.
The biggest reason is the sharp correction in Taiwan and South Korea.
Both markets had surged to record highs this year, driven by investor enthusiasm around (AI), semiconductor companies and technology stocks.
However, that rally has lost steam in recent weeks as investors booked profits amid rising concerns over stretched valuations and volatility in global technology shares.
During June, Taiwan’s market capitalisation declined 2.3%, while South Korea’s dropped 4.7%, taking both markets below the $5 trillion mark.
India, meanwhile, has moved in the opposite direction.
Its market capitalisation has risen 2.75% so far this month, helping it climb back to the fifth position.
Indian equities have outperformed many global peers in June.
In dollar terms, the Sensex has gained 3.8%, while the Nifty has risen 2.8%. The broader market has performed even better, with the BSE MidCap 150 index up 1.3% and the BSE SmallCap 250 index gaining 4.4%.
Several factors have supported the rally.
The biggest boost has come from the sharp decline in crude oil prices after tensions in West Asia eased and tanker movement through the Strait of Hormuz resumed. Lower oil prices are positive for India as they reduce the country’s import bill, help contain inflation and improve the current account balance.
According to ICICI Securities, the recent fall in crude prices could support Indian equities because the Nifty 50 historically performs better when oil prices remain well below the $90-100 per barrel range.
Another reason behind the rally has been improving valuations.
After trading at a price-to-earnings (P/E) multiple of nearly 24 times at its peak, the Nifty is now valued at around 18 times, making Indian equities relatively more attractive.
Foreign institutional investors (FIIs) have also returned as buyers, purchasing around $1 billion worth of Indian equities in recent sessions.
Analysts say investor confidence has also improved after the Reserve Bank of India’s recent measures to attract foreign investment into debt markets and as geopolitical concerns surrounding the West Asia conflict have eased.
Not yet.
Despite reclaiming the fifth spot globally, India continues to lag several major markets in 2026.
So far this year, India’s market capitalisation has declined 4.8% in dollar terms.
In comparison, South Korea’s market capitalisation has surged 74%, while Taiwan has gained 52%. China’s market is up 13.5%, Japan has added 11.7% and the US has gained around 10%.
This means India’s rise in the rankings has been driven more by recent corrections in rival markets than by a strong year-to-date performance.
The latest rankings underline how quickly global market leadership can change.
For India to retain its fifth position, analysts say earnings growth, continued foreign investment and stable crude oil prices will remain crucial.
Much will also depend on whether the correction in AI and semiconductor stocks in Taiwan and South Korea deepens or whether those markets resume their rally.
For now, India has regained its place among the world’s five largest equity markets—a reminder that while global markets remain volatile, improving domestic sentiment and easing oil prices have helped Dalal Street regain lost ground.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)