South Korea overtakes Canada as world’s seventh‑largest stock market

South Korea’s equity market now ranks seventh globally, surpassing Canada after a 71% surge in market capitalisation to $4.59 trillion this year [1]. The leap was driven by explosive demand for AI‑related semiconductors, with Samsung Electronics and SK Hynix each more than doubling their valuations as they dominate the memory‑chip cycle [2].

Both chip giants together account for roughly half of the KOSPI’s weighting, propelling the index above the 7,000‑point mark for the first time and delivering a 70% gain in 2024 [4]. Their dominance reflects the broader AI boom, where global tech firms are racing to secure high‑bandwidth memory for data‑center workloads, pushing memory prices higher and feeding back into South Korean stock prices [4]. In contrast, Canada’s S&P/TSX Composite, weighted toward energy and financials, rose only about 7% to a market cap of $4.5 trillion [1].

Analysts note that the shift underscores how sector composition now dictates national market fortunes. Korea’s tech‑heavy exposure has attracted capital flows that would have previously favoured more diversified economies, while Canada’s reliance on traditional industries limits its upside in the current growth cycle [1]. The re‑ranking also raises questions about market breadth; the rally is concentrated in a few mega‑caps, leaving the broader Korean market vulnerable to a slowdown in semiconductor demand [3].

If the AI‑driven memory cycle sustains, Korea’s market weight in global equity indices could rise further, inviting more passive fund inflows. Conversely, any dip in chip demand or geopolitical tension could reverse the gains, testing the resilience of a market built on a narrow set of players. The next move of Samsung and SK Hynix will therefore be a key barometer for South Korea’s standing among the world’s top equity markets.