Sebi Chief Says Indian Markets Can Withstand West Asia Crisis Shocks

Sebi Chief Highlights Resilience Of Indian Financial Markets

Securities and Exchange Board of India Chairman Tuhin Kanta Pandey on Monday said Indian financial markets remain resilient and capable of absorbing global shocks despite rising volatility triggered by the ongoing conflict in West Asia.

Speaking to reporters on the sidelines of the Regional Investors Seminar for Awareness, Pandey acknowledged that geopolitical tensions in the region have increased uncertainty across global financial markets and impacted multiple economies worldwide.

However, he stressed that India’s markets have historically demonstrated strong resilience during periods of international disruptions and economic uncertainty.

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West Asia Conflict Raising Inflation And Oil Price Risks

According to Pandey, the ongoing crisis in West Asia has disrupted global oil supply chains, leading to concerns around energy prices and inflationary pressures across countries.

“When there is a crisis in one part of the world, it impacts the rest of the globe,” Pandey said while explaining the interconnected nature of global financial systems.

He noted that higher oil prices could create inflationary risks while also triggering spillover and second-order effects across economies and markets.

The remarks come at a time when global investors are closely tracking geopolitical developments in West Asia due to fears of prolonged disruptions in crude oil supply and rising energy costs.

India, which imports a significant portion of its crude oil requirements, remains particularly sensitive to fluctuations in international energy prices.

Domestic Investors Continue Supporting Indian Markets

Despite global uncertainties and volatility, Pandey said Indian markets have shown the ability to recover and return to normal growth trajectories once external shocks stabilise.

He also acknowledged that foreign portfolio investor (FPI) outflows have been observed since September 2024. However, domestic investors have continued to maintain confidence in Indian equity markets.

The growing participation of retail investors and strong domestic institutional flows have helped Indian markets remain relatively stable even during periods of global risk aversion.

Market experts believe India’s strong macroeconomic fundamentals, expanding retail investor base and consistent domestic inflows have significantly improved the resilience of Indian capital markets over the past few years.

Global Markets Remain Closely Interconnected

Pandey further stated that fluctuations in financial markets are natural because global economies and markets remain deeply interconnected.

The comments come amid heightened investor caution globally as geopolitical tensions, inflation concerns and central bank policy uncertainty continue influencing market sentiment.

Despite near-term volatility, analysts believe India remains one of the relatively better-positioned emerging markets due to its stable economic growth outlook and strong domestic demand environment.