The total market capitalisation of companies listed in Taiwan reached about $4.14 trillion as of Wednesday, edging past the UK’s roughly $4.09 trillion, according to Bloomberg data.
This places Taiwan as the world’s seventh-largest equity market.
The rally has been powered by a strong surge in the Taiex index, which has not only recovered losses triggered by the West Asia conflict but also moved to record highs, making it one of the fastest markets to bounce back.
Chip giant Taiwan Semiconductor Manufacturing Company has also hit fresh peaks, driven by robust revenue growth and its central role in the global AI supply chain.
Market participants continue to view Taiwan as a proxy for AI hardware demand. As long as spending on artificial intelligence remains strong, investor flows into Taiwanese equities are likely to stay firm.
This momentum comes despite Taiwan’s economy being significantly smaller than the UK’s.
IMF estimates for 2026 peg Taiwan’s GDP at $977 billion, compared to the UK’s $4.3 trillion. However, booming exports of AI-related products are lifting growth expectations for the island.
The Taiex has surged 16% so far this month and extended gains into Thursday, rising up to 0.7% and marking its eighth consecutive session of advances, its longest winning streak since 2025.
In contrast, the UK’s FTSE 100 has lagged, rising less than 4% amid concerns over persistent inflation and relatively higher interest rates compared to other European economies.
That said, UK equities continue to attract interest as a defensive play in a volatile geopolitical environment. Strong exposure to energy and commodity-linked sectors has made the market appealing to global investors, especially with elevated oil and metal prices.
Strategists at major global firms including Barclays, Citi, and HSBC have turned constructive on the FTSE 100, citing its positioning as both a hedge against geopolitical risks and a relatively resilient market in uncertain times.
Energy and basic materials together account for nearly a fifth of the UK market capitalisation, sectors that tend to perform well during periods of high commodity prices.
Notably, the UK market had also outperformed peers during the global stagflation phase in 2022.
A Bank of America survey in April showed improving sentiment towards UK equities, ranking it as the second most preferred market in Europe after Switzerland.
However, global fund managers remain cautious overall, with a net 16% still underweight on British stocks, slightly higher than 15% in the previous month.
With Bloomberg inputs
