Stay patient during volatility, markets remain resilient despite global shocks: SEBI chief Tuhin Kanta Pandey

Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Friday urged investors to remain patient amid heightened global uncertainty, saying capital markets have been “severely impacted” by geopolitical tensions but periods of extreme volatility do not last forever.

Speaking at an event, Pandey said the ongoing conflict in West Asia, energy disruptions, and rapid shifts in global capital flows have created turbulence across financial markets, but the key test for any system is whether it continues to function smoothly during such stress.

“Geopolitical tensions are shaping economic relationships. Conflict in the Middle East has massively disrupted energy supplies. Inevitably, capital markets have been severely impacted,” Pandey said.

He added that volatility has become a defining feature of modern markets, but investors should not assume that instability will persist indefinitely.

“One lesson becomes clear — periods of extreme volatility don’t last forever. The real test for the market is whether the system continues to function smoothly and efficiently when volatility comes,” he said.

Markets more connected to global developments

Pandey said India’s capital markets have grown significantly in size and participation over the past decade, making them more resilient but also more sensitive to global events.

“Indian capital markets are deepening, diversified and becoming increasingly resilient. But as markets grow in scale and complexity, they also become more closely connected to global developments,” he said.

He noted that the speed at which information moves today has increased market reactions, making volatility sharper than in the past.

“News travels very fast, opinions travel even faster, and markets react almost instantly. The question before policymakers and market participants is how to ensure that speed does not compromise stability,” Pandey said.

He also pointed to structural changes such as algorithmic trading, artificial intelligence and data-driven investing, which have accelerated the pace at which markets operate.

Efficient markets key to investor confidence

Pandey said efficient capital markets are essential for economic stability, as they enable transparent price discovery and help absorb shocks without destabilising the broader financial system.

“They enable transparent price discovery. They help absorb shocks without destabilising the broader financial system. And most importantly, they sustain investor confidence. Efficiency is the foundation of trust in the financial system,” he said.

He added that efficient markets cannot be built by regulators alone and require cooperation from all participants.

“Efficient markets are a shared responsibility,” Pandey said.

Reforms to improve market access

Pandey also referred to the government’s notification of changes to the Securities Contracts (Regulation) Rules, saying the objective has been to make market access simpler and more transparent.

He said India’s capital markets are increasingly moving from supporting economic growth to shaping it, as companies rely more on equity and bond markets for funding.

“The next phase of development will require deeper bond markets, stronger institutional participation and continued technological innovation,” he said.

Pandey added that SEBI is strengthening surveillance systems and monitoring misleading social media content to protect investors, while ensuring markets remain fair, efficient and resilient even during periods of global uncertainty.