The strongest earnings growth has come from East Asian markets. South Korea’s KOSPI posted a remarkable 56.1 per cent rise in earnings, while Taiwan’s TWSE recorded growth of 19.5 per cent

India’s benchmark Nifty 50 remains one of the most expensive major emerging market (EM) indices, despite posting some of the weakest earnings growth in 2026 — a combination that has coincided with one of the poorest market performances among its EM peers this year.

businessline analysis of data from Bloomberg as of May 29, 2026, shows that Nifty 50 companies recorded year-to-date earnings growth of just 1.3 per cent, placing India ahead of only China’s SHCOMP (-3.8 per cent) and Singapore’s STI (-5.8 per cent) among the major emerging market indices tracked. Yet, Nifty continued to trade at a price-to-earnings (P/E) ratio of 19.88, the third-highest valuation in the group.

Earnings momentum

The strongest earnings growth has come from East Asian markets. South Korea’s KOSPI posted a remarkable 56.1 per cent rise in earnings, while Taiwan’s TWSE recorded growth of 19.5 per cent. Both markets also delivered exceptional returns to investors, with the KOSPI surging 96.7 per cent year-to-date and TWSE gaining 52.4 per cent.

In South Korea, Samsung Electro-Mechanics (SEMCO) saw its stock value multiply over seven times by May 29 from last year, driven by its dominance in AI server internal components and cooling infrastructure. Meanwhile, semiconductor powerhouse SK Hynix crossed the historic $1 trillion valuation mark on May 27 by leveraging a virtual monopoly on high-bandwidth memory (HBM) chips supplied directly to Nvidia.

In Taiwan, TSMC single-handedly commands nearly half of the TWSE’s entire value, soaring to a massive $1.9 trillion market capitalisation as the ultimate manufacturing bottleneck for every major tech giant, including Nvidia, AMD and Apple. Alongside it, MediaTek doubled its stock value via its premium Dimensity chip series — triggering a massive on-device generative AI smartphone upgrade cycle — while expanding high-margin revenues through an EV-focused smart vehicle partnership with Nvidia.

Other markets also outpaced India on the earnings front. Thailand’s SET index reported earnings growth of 11.8 per cent, closely matched by Malaysia’s FBMKLCI at 11.8 per cent, while Brazil’s IBOV expanded earnings by 8.2 per cent.

The sharp divergence suggests that investors have increasingly rewarded markets where corporate profit growth has accelerated, particularly those linked to the global artificial intelligence and semiconductor supply chain.

Valuation gap

Despite modest earnings growth, India’s valuation remains elevated. Only Taiwan, with a P/E ratio of 29.26, and South Korea, at 21.07, trade at higher multiples. China’s SHCOMP follows closely at 19.18, while most other emerging market benchmarks trade at significantly lower valuations.

The contrast is particularly striking given that Taiwan and South Korea have paired higher valuations with substantially stronger earnings expansion and market returns.

Published on June 1, 2026