The war in the Middle East middle east has deeply impacted India, along with global markets, but the country’s strong fundamentals are providing resilience, Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey said. Markets are experiencing tremors of the war, choking off vital shipping lines and triggering shocks in energy supply as well as prices, he said.
“It’s important not to panic at this moment, but to remain calm amidst the storm,” Pandey said while speaking at the Nifty 50’s 30-year anniversary. The chairman’s comments come at a time when investors have lost ₹22.4 lakh crore in just five sessions since the geopolitical tension between the US-Iran aggravated since February 28.
Markets on Monday
On Monday, the 50-stock index hit a 10-month low before closing almost 2% lower at 24028.15 points. However, many fund managers still believe that the current fall is a good entry opportunity for equity investors as the ongoing war is expected to end soon.
While the Nifty 50 was originally introduced as a benchmark index, its role has expanded considerably over time, Pandey said. Over the last three decades, the index has become one of the most widely tracked indicators of India’s market. Since its inception in 1996, the index has delivered over 12% compound annual growth rate or 25-fold rise.
Nifty 50 constituents together account for around 44% of the total market capitalization of all listed companies. The market capitalization of National Stock Exchange (NSE)-listed companies now exceeds 130% of GDP compared with around 35% more than four decades ago. Individuals and domestic mutual funds together hold about 36% of the free-float market capitalisation of Nifty 50 companies.
Regulatory frameworks have evolved to support the expansion of markets while safeguarding integrity. Key areas such as market surveillance systems, clearing and settlement mechanisms, and risk management practices have been strengthened over time, Pandey said.
Expert group set up
A high-level expert working group has been set up to develop a short-term and long-term strategic technology roadmap for the securities market ecosystem. Technology is increasingly central to both market functioning and regulation, the chairman added. The regulator is also strengthening its supervisory capabilities through internally developed tools and is also deploying analytical tools to conduct sentiment analysis of corporate announcements.