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Asian Markets Tumble on AI Capex Fears
31 Jul
Summary
- South Korea and Taiwan stocks declined due to AI capex sustainability concerns.
- Taiwan and South Korea fell to seventh and tenth globally in market cap.
- India remained resilient, securing sixth place with $5.1 trillion market cap.
By July 31, 2026, South Korea and Taiwan have seen their market capitalizations fall sharply after initial gains earlier in the year, specifically before the third week of June 2026. This decline is attributed to growing concerns regarding the long-term sustainability of capital expenditures related to artificial intelligence (AI).
Taiwan has dropped to seventh place and South Korea to tenth in global stock market rankings. South Korea's market cap decreased by 26.8% over the past month to $3.4 trillion, while Taiwan's fell by 15% to $4.4 trillion. A potential tax on unrealized capital gains also impacted the South Korean market.
In contrast, Indian equities have shown considerable resilience. The Sensex recorded a modest gain of 0.6% over the past month. As a result, India has secured the sixth position in the global market capitalization table with a total market capitalization of $5.1 trillion, outperforming its regional rivals amidst the ongoing AI capex concerns.
