TAIPEI (Taiwan News) — Taiwan’s stock market capitalization has surpassed India’s, making it the world’s fifth-largest equity market, driven by a strong rally in TSMC amid continued investor enthusiasm over AI-related technology stocks.
Taiwan’s stock market capitalization rose to US$4.95 trillion (NT$155.65 trillion) as of Monday, while India’s market value had fallen to US$4.92 trillion, per Bloomberg. Taiwan now trails only the US, China, Japan, and Hong Kong markets.
Taiwan’s rise has been fueled primarily by TSMC, with the chipmaker now accounting for more than 42% of the Taiwan Weighted Index, Bloomberg reported. TSMC shares have surged 49% so far this year as the company continues to benefit from the AI boom and its dominance in foundry services.
Bloomberg analysts said Taiwan’s soaring market capitalization and India’s decline highlight two major themes that are dominating financial markets in 2026. The first is the Iran war, which has sent oil prices sharply higher and hurt the economic outlook for energy-importing countries such as India.
The second is strong investor optimism surrounding AI, which has driven global tech stocks higher and particularly benefited semiconductor manufacturing powerhouses such as Taiwan and South Korea.
Franklin Templeton fund manager Liao Yi Ping told Bloomberg, “Taiwan’s rising market capitalization is fundamentally a reflection of its heavy concentration in tech hardware, which is currently at the center of the AI investment cycle." Liao added that "Markets with limited exposure to tech hardware are increasingly being overshadowed by tech hardware–heavy markets such as Taiwan and Korea.”
New regulations have also benefited TSMC. Taiwan’s Financial Supervisory Commission last month raised the limit on how much domestic funds can invest in a single stock.
Under the revised rules, funds focused exclusively on Taiwanese equities may allocate up to 25% of their net assets to a single listed company if that stock accounts for more than 10% of the Taiwan Stock Exchange’s weighting, compared with the previous 10% ceiling. TSMC is currently the only company that qualifies under the rule.
JPMorgan Chase said the change could attract more than US$6 billion in inflows into Taiwan’s market, according to Aastocks.
Although Taiwan has surpassed India in stock market value, the International Monetary Fund estimates India’s economy at US$4.15 trillion and ranks it among the world’s fastest-growing economies, far larger than Taiwan’s US$977 billion in gross domestic product.
