MUMBAI: Sebi chairman Tuhin Kanta Pandey has urged harried investors -- who have lost more than Rs 25 trillion of their wealth since the US-Israel war on Iran began 10 days ago -- not to panic but remain calm and avoid panic-driven decisions, saying strong domestic fundamentals have helped our markets remain resilient.
Global markets are also witnessing turbulence as the conflict has disrupted a key shipping route and triggered shocks in oil and gas supply as well as their prices, Pandey said while addressing an event to celebrate 30 years of the Nifty 50 index at the NSE here this evening.
“Investors should remain calm and avoid panic reactions,” he said, emphasising that while the country is affected by global developments, our domestic economic fundamentals remain strong.
“Amid such uncertainties, our fundamentals continue to remain strong, providing resilience. It is important not to panic at this moment, but to remain calm amidst this storm,” said Pandey, noting that the benchmark index has navigated several phases of uncertainty and global shocks while delivering long-term growth.
So far this year, the indices have corrected nearly 8%, largely due to global volatility and closed at an 11-month low today losing over 1.78% on the back of another 4.5% loss in the last four trading days since the war began on the last day of last month.
The Nifty 50 has recorded a compounded annual growth of around 11%, increasing nearly 25-fold since its inception 30 year ago, Pandey said, adding more than 40 exchange-traded funds (ETFs) now track the index, offering investors simple and cost-effective avenues to participate in the equity markets.
“Over the past 30 years, the Nifty has become a mirror of corporate India, a barometer of investor sentiment, and a compass for the direction of our markets,” he added.
“The next generation of companies that shape our markets may come from industries that are still at an early stage today. As our economy continues to grow and integrate with global financial systems, our markets will also become larger and more complex, creating new opportunities, but also new responsibilities,” he said.
Highlighting the competitive yet collaborative approach among stock exchanges, the Sebi chief said developments such as common contract notes and interoperability reflect a deeper and more mature market ecosystem.
Meanwhile, NSE managing director Ashishkumar Chauhan later told reporters that the exchange plans to appoint investment bankers within this month for its long-awaited initial public offering, which has been in the making since 2016 but got mired in many a regulatory issue.
Addressing concerns about potential delays due to the pending notification on the regulator’s decision to allow a lower public float for mega IPOs, Chauhan said Sebi has allowed the NSE to proceed with a smaller float because there is no identifiable promoter.
On concerns around volatility in crude prices, Chauhan said, “As a nation we would be able to handle the situation better than many other Asian countries which are more dependent on imports, not only oil but also refined products. That's where we seem to be doing better.”