On Wednesday (15th), the market capitalization of Taiwan’s stock market officially surpassed that of the United Kingdom, becoming the seventh largest stock market in the world. Data compiled by Bloomberg show that as of Wednesday, the total market value of Taiwan's stock market has risen to US$4.14 trillion, while the market value of the British stock market is approximately US$4.09 trillion.
Taiwan's stock market was one of the first major markets in the world to recover from losses caused by the Iran war. Driven by strong revenue growth, the share price of the capital stock TSMC hit a record high on Wednesday, highlighting its key position in the global artificial intelligence (AI) supply chain. Yoon Ng, head of Asia Pacific asset management at Broadridge Financial Solutions, said that as long as the momentum of AI-related capital expenditures continues, Taiwan's status as a byword for AI hardware will continue to attract capital inflows and provide support for the overall market.
Although the International Monetary Fund (IMF) forecasts for 2026 that Taiwan's economy will be approximately US$977 billion, still significantly behind the UK's US$4.3 trillion economy, the sharp increase in exports of AI-related products has significantly boosted market expectations for Taiwan's economic growth prospects. The weighted index of Taiwan stocks has risen by 16% since this month. It once rose another 0.7% in early trading on the 16th, heading towards the eighth consecutive trading day of gains. This will be the longest consecutive rise since 2025.
In comparison, UK stock markets have lagged significantly. The British stock market, represented by the FTSE 100 index, has risen less than 4% this year, mainly dragged down by stubborn inflation and interest rates higher than elsewhere in Europe. However, most strategists still hold a positive view on the mid- to long-term prospects of the British stock market. They believe that in an environment of increasing geopolitical uncertainty, the weight of energy and defensive stocks in British stocks is relatively high, which has the advantage of attracting the return of risk-averse or defensive funds.
Strategists at many major banks, including Barclays, Citigroup and HSBC Holdings, are optimistic about the FTSE 100's future performance. HSBC strategist Duncan Toms pointed out that commodity-related industries, mainly energy and basic materials, may benefit from higher energy and metal prices, and these industries account for nearly one-fifth of the UK stock market value. He also mentioned that when the world faced stagnant inflation in 2022, the British stock market was one of the best-performing markets in the world.
A survey by Bank of America (BofA) in April this year also showed that in European stock markets, the UK is one of the most popular markets for investors after Switzerland. This means that while the AI craze has pushed Taiwan's stock market value to rank seventh in the world, the British stock market, supported by the energy and defensive sectors, is still regarded as an important allocation target in the geopolitical and inflationary environment.