New Delhi, 02 June (H.S.): Amid the ongoing crisis in West Asia, India's domestic stock market has suffered a setback on the global front, slipping to seventh position in the global equity market capitalisation rankings.

According to Univest, a stock market advisory and SEBI-registered investment platform, the Indian stock market has fallen to seventh place in the global equity market capitalisation rankings as of June 2. The decline has been driven largely by the remarkable rise of major semiconductor manufacturers, which have continued to set new records on the back of the growing adoption of Artificial Intelligence (AI).

The market capitalisation of South Korean companies has surged by 86 percent to reach USD 5 trillion (approximately ₹475 lakh crore), while the market capitalisation of the Indian stock market has declined to USD 4.8 trillion (around ₹456 lakh crore).

According to data released by Univest, the Nifty and Sensex have suffered losses of 11–13 percent so far this year due to sustained underperformance. With geopolitical tensions continuing in West Asia, there are no immediate signs of recovery. The primary factors weighing on the market include the ongoing conflict involving the United States and Iran, crude oil prices rising to nearly USD 95 per barrel, foreign institutional investors (FIIs) selling equities worth ₹55,963 crore in May alone, and forecasts of a below-normal monsoon.

The decline in India's ranking is particularly significant because the Indian stock market had climbed to fourth place in the global rankings in 2024. Since then, the growing impact of global macroeconomic challenges has weakened both its overall market capitalisation and its relative position among global markets.

A major reason behind the market's decline has been the continuous withdrawal of funds by foreign investors. In addition, the depreciation of the Indian rupee against the US dollar has adversely affected market sentiment. Another contributing factor is that global investors are increasingly allocating capital to companies linked to AI infrastructure, whereas the Indian stock market has a relatively limited presence of such companies.

Market experts believe that although South Korea and Taiwan may have surpassed India in terms of stock market valuation, India's real economy remains substantially larger and stronger. According to estimates by the International Monetary Fund (IMF), India's Gross Domestic Product (GDP) stands at USD 4.15 trillion, compared with South Korea's GDP of USD 1.93 trillion. Furthermore, India continues to remain one of the world's fastest-growing major economies.

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Hindusthan Samachar / Jun Sarkar