India Overtakes Taiwan to Become World’s 5th Largest Stock Market Again
India has reclaimed its position as the world's fifth-largest stock market, surpassing Taiwan with a total market value of approximately $5.4 trillion after adding about $640 billion since late October.
India has overtaken Taiwan to become the world's fifth-largest stock market again. Its total value reached about $5.4 trillion after adding roughly $640 billion since late October, Bloomberg data shows. The Nifty 50 closed at 25,255.05 on November 11, according to Google Finance, which is 13.6% above its October 8 close, the year's low.
Taiwan's market moved in the opposite direction. The TAIEX fell 20.3% from its October 6 peak to its November 6 close. The shift comes as chip stocks have been sliding since early October on worries about AI spending, with the selloff deepening after the November 4 US midterms raised doubts over data center construction.
Foreign Investors Drive Recovery
Foreign portfolio investors (FPIs) bought a net $6.42 billion of Indian equities in November so far, per NSDL. That recovers most of the $7.35 billion they sold in September and October. Cheaper oil also helped, with EPFR's Cameron Brandt noting that lower oil prices improved flows into dedicated India equity funds.
India as Reverse AI Trade
Jefferies strategist Christopher Wood has called India a reverse AI trade, suggesting Indian stocks should outperform if the AI trade unwinds. This view has gained attention amid recent bubble warnings. Sixth Street CEO Alan Waxman told Bloomberg on November 11 that AI's spending economics remain poorly understood.
India would not be hurt if the AI bubble burst, since it never drew such investment.
Goldman Sachs strategist Timothy Moe told CNBC that markets less exposed to AI, like India, should see relative outperformance. However, Bernstein rejects that view, citing expensive Indian valuations. The firm stated: 'India is neither an AI beneficiary nor an anti-AI trade.'
Market Outlook
FPIs remain net sellers of $24.98 billion in Indian shares for 2026, per NSDL. A gradual rotation out of chip stocks would likely continue favoring India, though a broad crash would likely hit emerging markets together. Meanwhile, the TAIEX closed November 12 up 8.5% from its November 6 low, despite a 2.6% daily drop. The next few weeks of FPI data should show whether November's buying marks a lasting shift.
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