India's stock market becomes 5th-largest, surpasses Taiwan
What's the story
India's stock market has reclaimed its position as the world's fifth-largest, surpassing Taiwan. The country's market capitalization has surged to $5.4 trillion, a jump of about $640 billion since late October. This growth is mainly due to a strong performance by benchmark indices Nifty and Sensex amid a major reversal in foreign investment flows.
Market performance
Nifty 50, Sensex record strong performance
The Nifty 50 closed at 25,299.35 on Thursday, its highest in over eight months. It has gained nearly 10% so far this November.
Meanwhile, the Sensex ended at a high of 81,911.01 after ending nearly flat in today's session. It has gained approximately 8.22% (about 6,218 points) so far in November 2026.
Investment trends
Reversal in foreign investment flows fuels rally
The recovery in India's stock market has been largely fueled by a sharp reversal in foreign investment flows.
Foreign portfolio investors (FPIs) have made net purchases of ₹65,735 crore worth of Indian equities in November till the 11th.
This is a stark contrast to October when foreign investors had sold off equities worth ₹45,162 crore.
Market dynamics
Domestic institutional investors on sell side
While FPIs have been active buyers in November, domestic institutional investors (DIIs) have sold shares worth ₹40,504 crore.
This marks a reversal from October when DIIs were on the buy side and FIIs were on the sell side.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, noted this shift in market positions between FIIs and DIIs.
Market influences
Pullback follows AI-linked market corrections
The shift in investment flows has come as AI-linked markets such as Taiwan and South Korea have corrected.
These markets had earlier witnessed strong demand for semiconductor companies amid a global AI rally.
However, concerns over spending on AI infrastructure and profitability of tech companies have triggered a pullback.
Notably, foreign investors pulled out $30.68 billion from Taiwanese equities and $14.59 billion from South Korean stocks in October.
Earnings boost
Better-than-expected corporate earnings boost recovery
India's stock market rally has also been supported by better-than-expected corporate earnings. The Q2 results of 35 Nifty 50 companies that had reported their results witnessed a year-on-year growth of 22%.
Further, falling oil prices have also aided the recovery. Brent crude has fallen about 19% in November, easing pressure on India's import bill and inflation outlook.