Bhubaneswar, May 18 (PTI) Volatility has shot up in the financial markets due to the ongoing West Asia conflict, but the Indian bourses have the capacity to “absorb different types of shocks”, Sebi Chairman Tuhin Kanta Pandey said on Monday.

When there is a crisis in one part of the world, it also impacts the rest of the globe, Pandey told reporters here on the sideline of the Regional Investors Seminar for Awareness.

“Due to the prevailing conflict in West Asia, the oil supply chain and its prices got affected in the rest of the world. All the economies have been affected by this and obviously, there are inflationary risks. Besides, spillover effect and second-order effect will also come in,” he said.

“However, the advantages of a resilient Indian market are that it is able to absorb different types of shocks, and when these end, the market again resumes its normal trajectory,” Pandey said.

He also admitted that there have been some foreign portfolio investment outflows since September 2024, but domestic investors have “retained their confidence”.

“Ups and downs in the market are quite natural because globally they are interconnected,” the Sebi chairman said. PTI BBM RBT

Market resilience and domestic investor confidence help Indian markets absorb global shocks and recover after volatility eases. Indian markets are described as resilient enough to absorb external shocks arising from global crises, including conflict-driven volatility, supply chain disruption, inflationary pressure, spillover effects and second-order effects. The market impact of international developments is presented as natural in an interconnected global system, while the domestic market is said to regain its normal trajectory after the shock subsides. The statement also notes foreign portfolio investment outflows since September 2024, alongside continued confidence among domestic investors.