India, China and Hong Kong Trail in Global AI Race as Market Cap Concentration of Largest Companies Declines

AI Boom Reshapes Global Equity Markets

Artificial intelligence has become one of the most influential themes driving global stock market performance over the past year.

Technology companies involved in semiconductor manufacturing, AI infrastructure, high-performance computing, and advanced hardware have experienced substantial gains, resulting in a growing concentration of market capitalisation among a relatively small number of companies.

This trend has been particularly visible in markets with significant exposure to AI-related industries, where leading companies have contributed disproportionately to overall index performance.

India Records Decline in Market Concentration

India has witnessed a reduction in the market share held by its largest listed companies.

Currently, the country’s ten biggest companies account for approximately 19% of the total market capitalisation, compared with around 22% during the previous year.

Unlike several global markets where AI-focused companies have dominated investor attention, India’s largest listed firms continue to be concentrated in sectors such as banking, energy, information technology services, and consumer businesses.

This diversified market structure has limited the increase in concentration that has been observed elsewhere.

China and Hong Kong Also See Lower Concentration

China has experienced a similar pattern.

The ten largest listed companies now represent approximately 19% of the country’s overall market capitalisation, down from nearly 26% a year earlier.

Hong Kong has also recorded a slight decline, with the concentration of its largest companies falling to around 9.8%, compared with approximately 10% previously.

The reduction reflects broader participation across multiple sectors rather than dominance by a handful of large technology companies.

Taiwan Benefits from Semiconductor Leadership

Taiwan has emerged as one of the strongest beneficiaries of the global AI expansion.

The country’s equity market has recorded substantial gains during the year, supported primarily by companies involved in semiconductor manufacturing and advanced chip production.

The increasing global demand for AI processors and high-performance computing infrastructure has significantly boosted valuations within Taiwan’s technology sector.

As a result, the market capitalisation share of Taiwan’s ten largest companies has increased from approximately 49% to 56% over the past year.

South Korea Witnesses Sharp Rise

South Korea has also experienced a significant shift in market concentration.

The country’s leading semiconductor and electronics companies have benefited from increasing global investment in artificial intelligence technologies.

The market capitalisation share of South Korea’s ten largest companies has risen sharply to approximately 65%, compared with around 32% during the previous year.

The country’s benchmark equity index has also recorded strong gains, reflecting the growing importance of AI-related industries within its economy.

Traditional Leaders Continue to Dominate India

India’s benchmark indices remain heavily influenced by established companies across traditional sectors.

Large corporations operating in banking, financial services, energy, consumer goods, and IT services continue to represent a substantial portion of the market.

Companies providing conventional software services remain important contributors to India’s technology sector, although the rapid emergence of generative AI and related technologies has altered the competitive landscape globally.

The broader Indian equity market therefore remains relatively diversified compared to AI-driven markets.

AI-Linked Companies Gain Ground in China

Although China’s largest companies have seen a decline in overall concentration, several AI-related businesses have performed strongly.

Companies associated with semiconductor manufacturing, optical fibre technology, and AI hardware have attracted investor interest as demand for advanced computing infrastructure continues to expand.

These gains have contributed positively to selected segments of the Chinese equity market, even as overall market concentration has become more evenly distributed.

Broader Market Participation Continues

One notable feature of India and China has been broader participation across multiple sectors.

Rather than a small number of companies driving the majority of market gains, performance has been distributed among businesses operating across manufacturing, financial services, industrials, consumer sectors, healthcare, infrastructure, and technology.

This diversification has resulted in relatively lower concentration despite continued growth in several industries.

Conclusion

India, China, and Hong Kong are currently among the few major equity markets where the share of market capitalisation held by the largest listed companies has declined over the past year. India’s top ten companies now account for approximately 19% of the total market value, while China has also recorded a similar reduction. In contrast, AI-driven growth has significantly increased market concentration in Taiwan and South Korea, where semiconductor and technology companies continue to play a central role in shaping equity market performance. The evolving global AI landscape is increasingly influencing how capital is distributed across major stock markets worldwide.

Summary

India, China, and Hong Kong have emerged as the only major equity markets where the market capitalisation share of the largest listed companies has declined over the past year. The trend reflects the comparatively slower participation of these markets in the global artificial intelligence (AI)-driven rally that has reshaped stock markets worldwide. While AI-focused companies have significantly increased the concentration of market value in countries such as Taiwan and South Korea, India’s largest firms now account for approximately 19% of the total market capitalisation, compared with 22% a year ago. China has also witnessed a similar decline, while Hong Kong recorded a modest reduction. The changing market dynamics highlight how AI-related industries are increasingly influencing global equity market leadership.