West Asia crisis raises oil risks; India markets remain resilient: SEBI chief

Indian markets are capable of absorbing shocks before returning to a “normal trajectory” once uncertainties ease

Indian markets have remained resilient despite heightened volatility triggered by the ongoing West Asia crisis, though fluctuations remain within manageable limits, Securities and Exchange Board of India (SEBI) chairperson Tuhin Kanta Pandey said here on Monday.

Pandey said market volatility had risen but was not beyond the capacity of investors. (Reuters)

Responding to the concerns over the impact of the geopolitical turmoil in West Asia on the Indian equities market, Pandey said market volatility had risen but was not beyond the capacity of investors and institutions to navigate.

“Indian markets have remained quite resilient, although volatility has increased. But it is not beyond something which markets cannot handle,” Pandey said, adding that resilient markets are capable of absorbing shocks before returning to a “normal trajectory” once uncertainties ease.

However, he cautioned that the current global crisis posed significant challenges because of its widespread implications, particularly through disruptions in oil prices and supplies.

“The current crisis is quite difficult in terms of the reach it has on the rest of the world. Particularly through oil. It is both a price and supply shock on oil to the rest of the world,” he said.

Economies globally are affected and faced inflationary pressures along with “spillover” and second-order economic effects, he added.

Pandey said the government was taking measures to address the situation and stressed that an early resolution of the crisis would benefit the global economy.

“The sooner this crisis gets resolved, the better it is for the rest of the world,” he said, while adding that market ups and downs were a natural feature of globally interconnected financial systems.

Highlighting the expansion of India’s capital markets over the past decade, the SEBI chief said market capitalisation rose sharply from ₹95 lakh crore in 2016 to around ₹463 lakh crore in April 2026. During the same period, the corporate bond market grew from ₹20 lakh crore to nearly ₹60 lakh crore.

Retail participation also surged significantly, Pandey said, with the number of unique investors rising to around 145 million from 38 million in 2019.

“Today we have around 145 million unique investors,” he said, pointing to strong participation in the primary market as well.

Despite a “very difficult year” for markets, Pandey said capital formation remained robust, with nearly ₹13 lakh crore raised through debt and equity markets last year.

Drawing a comparison with advanced economies, he said India witnessed 366 IPOs in the previous year, while “there are countries in the European Union, for example, they have not a single IPO in a whole year.”

He added that mutual funds emerged as a major channel for household participation in financial markets. Assets under management climbed from ₹12 lakh crore in 2016 to nearly ₹82 lakh crore by April 2026, while monthly Systematic Investment Plan (SIP) inflows increased more than tenfold-- from around ₹3,000 crore in April 2016 to over ₹31,000 crore in April 2026.

On foreign investment trends and market cycles, Pandey said every market undergoes phases of rise and decline relative to global peers. He pointed to factors such as earnings growth, foreign investment flows and currency movements as influencing investor returns, particularly post-tax dollar returns for overseas investors.

Reiterating concerns over the geopolitical situation, he said the oil-linked disruptions emerging from the West Asia conflict remained a major risk for economies worldwide, with inflationary and broader economic consequences likely to persist if the crisis drags on.