South Korea overtakes India as world’s sixth-largest stock market

South Korea has overtaken India to become the world’s sixth-largest stock market, moving ahead of Britain, Germany and France.

The Kospi index reached an all-time high of 8,880 this week after rising 220% in the past 12 months. The gains were led by two chipmakers, SK Hynix and Samsung Electronics, both now valued above $1 trillion.

SK Hynix joined the trillion-dollar club last week, joining Samsung and Taiwan’s TSMC. Demand for chips used in artificial intelligence has driven the valuations higher. SK Hynix shares have risen 1,000% in the past year, while Samsung shares have climbed 500%.

Goldman Sachs raised its 12-month target for the Kospi to 9,000, citing what it called a once-in-a-generation surge in semiconductor earnings.

Peter Kim, global investment strategist at KB Securities, said South Korea is now the first country outside the United States with more than one company worth at least $1 trillion. “I’m watching it in Seoul, and I still have to keep pinching myself,” he said.

Japan’s Nikkei 225 also hit a record high on Monday. SoftBank Group overtook Toyota as Japan’s most valuable listed company.

Kim said investors are shifting money from software platforms such as Alphabet, Amazon and Meta toward hardware companies that produce chips. He said Samsung and SK Hynix have accounted for up to 70% of the Kospi’s gains this year.

Russ Mould, investment director at AJ Bell, said the share-price charts of Samsung, SK Hynix and U.S. chipmaker Micron resemble patterns seen in 2000 before the dot-com bubble burst. Ipek Ozkardeskaya, senior analyst at Swissquote, noted that the Kospi’s VIX volatility index reached 75 this week, far above its usual level near 20.

Nvidia chief executive Jensen Huang visited Taiwan at the end of May and said his company plans to invest $150 billion a year there. He is scheduled to travel to South Korea this week.