- India,
- 29-Jun-2026 08:45 AM IST
The global financial landscape is currently dominated by a single narrative: the rise of Artificial Intelligence (AI), while however, a significant shift is occurring in this technological race, where traditional powerhouses like India, China, and Hong Kong are reportedly lagging behind. According to recent market data, the largest companies in these Asian nations have lost a substantial portion of their global market capitalization share. While American tech giants continue to ride the AI wave to new heights, the benchmarks in India and China are appearing increasingly sluggish in comparison.
Declining Market Share of Top Giants
According to data compiled by Bloomberg, the concentration of market power in the top ten companies of China and India has seen a notable decline over the past year. In both nations, the top ten companies now account for approximately 19 percent of the total market capitalization. This is a significant drop from a year ago, when these companies held 26 percent in China and 22 percent in India. 8 percent. This trend suggests that the lack of a singular, dominant AI leader in these markets is weighing down their overall performance.
The Success of Taiwan and South Korea
In stark contrast, markets like Taiwan and South Korea have seen their benchmarks soar, driven by companies deeply integrated into the global AI supply chain. Taiwan's benchmark index has surged by 54 percent this year, largely due to the phenomenal growth of Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading chipmaker. Similarly, South Korea's Kospi index has received a massive boost from high-bandwidth memory leaders like SK Hynix Inc. , nearly doubling its influence, while in South Korea, the top 10 companies now command a 65 percent market share, up from nearly half that a year ago. Taiwan has seen a similar trend, with the top 10 companies increasing their share from 49 percent to 56 percent.
India's Diversified but Challenged Setup
India's Nifty 50 benchmark, which is down approximately 8 percent this year, remains dominated by traditional giants like Reliance Industries and HDFC Bank. Even its premier technology firms, such as Tata Consultancy Services (TCS) and Infosys Limited, are primarily focused on software services. These service-based models are now perceived to be at risk from AI-driven disruptions, while charu Chanana, Chief Investment Strategist at Saxo Markets in Singapore, noted that the heavyweights in these indices are no longer providing the necessary momentum, and next-generation AI 'engines' have yet to emerge in the Indian market.
China's Complex AI Landscape
In China, the situation is more nuanced. While major internet firms and government officials have pledged to increase AI investment, the market remains fragmented. However, some specific AI-linked stocks have shown exceptional performance. These include Cambricon Technologies Corp, an intelligent processor manufacturer, semiconductor foundry SMIC, and Yangtze Optical Fibre and Cable Joint Stock Limited. Fabian Yip, a market analyst at IG International, observed that investors are shifting their focus toward companies with clear AI ties, while despite the drop in market cap share for the top ten companies, the CSI 300 index has managed a 5 percent gain this year due to broader participation across sectors like banking, insurance, and high-dividend state-owned enterprises.
Stability Through Diversification
Siddharth Vora, Head of Asset Management at PL Capital, suggested that India's lower concentration could offer stability. If the global AI spending spree is perceived as overextended, investors might pivot toward markets with diversified earnings bases. While India wouldn't be immune to a global correction, its domestic liquidity and broad earnings base could provide a cushion. Nevertheless, the current trend highlights a clear divide in Asia: markets with AI hardware winners are surging, while those reliant on traditional sectors or services are searching for their next growth engine.
