Summary of this article
Indian markets have turned volatile given geopolitical shocks
Markets resilient to absorb the shocks once uncertainty settles, says Pandey
Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey on May 18 said Indian financial markets have shown enough resilience to handle volatility arising from the ongoing conflict in West Asia, even as rising oil prices and supply disruptions pose inflation risks for the economy.
Speaking at an investor awareness programme in Bhubaneswar, Pandey said the conflict in West Asia has affected economies across the world due to higher crude oil prices and disruptions in supply chains. However, he added that Indian markets have the ability to absorb such shocks and return to stability once the uncertainty eases.
Pandey said volatility in global financial markets is natural because economies and markets are closely interconnected. He noted that despite foreign investor outflows seen since September 2024, domestic investors have continued to show confidence in Indian markets.
The Nifty 50 index has fallen around 5.6 per cent since the Iran war began. Meanwhile, data from April shows that foreign institutional investor (FII) ownership in Indian markets has fallen to a 14-year low of 14.7 per cent, while domestic institutional investors (DIIs) have cushioned the market, increasing their ownership to 18.9 per cent.
The Sebi chief noted the rapid expansion of India’s capital markets over the past decade, with mutual fund assets under management (AUM) rising to nearly Rs 82 lakh crore by April 2026 from around Rs 12 lakh crore in the financial year 2015-16. He also pointed out that India witnessed 366 initial public offerings (IPOs) in FY26, which reflects strong investor participation and fundraising activity.
Pandey also spoke about the growing participation of retail investors in the securities market. He said the number of unique investors in India has increased significantly in recent years, though rural participation still remains low. Referring to findings from Sebi’s Investor Survey 2025, he said that while awareness about financial products has improved, actual investment participation in rural India continues to lag behind urban areas.
Pandey also warned people against online financial frauds, fake trading applications and misleading investment advice circulating on social media platforms. He said Sebi has taken strict action against such activities and has removed over 1.4 lakh misleading online contents linked to illegal financial promotions and scams.
He also highlighted the “SEBI vs SCAM” campaign, which aims to educate investors about cyber frauds, illegal trading platforms, deepfake videos and unregistered financial advisers operating online. Pandey said investor awareness remains one of the regulator’s key priorities because informed investors are better protected from fraud and market manipulation.
Pandey further noted the importance of municipal bonds as an emerging source of financing for urban infrastructure projects. He said several urban local bodies across India have already raised funds through municipal bond issuances, and there is significant potential for states like Odisha to use this route for infrastructure development in the future.
