The market is starting to climb a wall of concern.
Go back to early 2020. After hitting a new all-time high in January, it attempted to regain momentum in February but failed to hit a new all-time high. What followed was one of the steepest declines in market history. On March 23, 2020, the index hit its lowest closing level due to panic, forced liquidation and complete collapse in visibility.
Two days later, on March 25, 2020, India imposed a nationwide lockdown. Economic activity has come to a complete halt. There is no clarity on revenue, no roadmap for recovery, and no timeline for normalization. If ever there was a moment when the market continued to slump, this was it.
But the market had other plans.
Stocks began to rise even before performance visibility improved or economic indicators stabilized. When India began its first vaccination phase in January 2021, the Nifty was already trading at record highs. The message was clear. The market discounts the future, not the present. They have already priced in the worst of the decline and any hope of recovery well before the data shows.
Revenue Collapse and Market Resilience
The difference between fundamentals and price action was stark.
In the first quarter of the 2020-21 financial year, companies reported multi-quarter lows in revenue growth, as reflected in the financial results of 489 companies (excluding those in the financial sector). Total revenue fell 31.1% year-over-year, with the consumer-facing segment plummeting nearly 49%. Fixed overhead costs and meager profits have significantly reduced profitability margins.
ETMarkets.comOn paper, it was one of the weakest earnings seasons in decades.
However, the market was not very shaken.
why? Because by then the market has already Discounted breakdown. Investors were looking ahead to economic reopening, recovery, and normalization. The pain was evident in the earnings, but the hope was already embedded in the prices.
2020: Crashes and Recovery
ETMarkets.comVolatility in 2026: Market Rebound Amid Uncertainty
ETMarkets.com2026: A familiar pattern emerges
Fast forward to 2026 and the patterns look eerily similar.
Nifty once again hit a new high in January 2026 and attempted to recover that level in February but failed to hit a new high. Then came the trigger. From February 28, 2026, the US-Iran conflict will escalate. Risk aversion has gripped global markets, leading to sharp corrections.
By March 30, 2026, the market had recorded its lowest closing price in the current cycle.
But since then, the index has made a meaningful recovery, reversing almost half of its losses. This is despite the absence of a definitive geopolitical solution, the absence of a clear peace agreement, and ongoing uncertainty about crude oil prices, inflation and revenues.
Even more interestingly, the downward momentum is starting to fade. Markets no longer react with the same intensity to negative developments.
The Power of Silence: Investor Behavior
ETMarkets.comPerhaps the most notable change this time lies beneath the surface of investor behavior.
While Nifty fell 11.31% in March 2026, inflows into equity mutual funds told a completely different story. Growth and equity-focused schemes saw inflows of ₹40,450 crore, a 56% monthly surge, hitting the highest level in eight months.
This isn’t just fluidity, it’s actually learning.
Investors shaped by the experiences of 2020 appear to have internalized important market truths. Periods of maximum fear often coincide with stages of maximum opportunity. Instead of retreating, capital is intervening.
What will happen next?
It would be premature and perhaps even imprudent to conclude that the market is poised for a sustained uptrend. The current environment remains fragile. Geopolitical risks persist, inflationary pressures are rising, and crude oil supply disruptions may put pressure on corporate earnings.
The market could very well retest that lower level.
But what recent price action shows is equally important. The market may already have begun to discount much of the risk.
As in 2020, when profits plummeted but markets rebounded, today’s environment presents a similar dichotomy. Short-term visibility is weak, but future expectations are improving.
key insights
The market doesn’t wait for clarity – it gets ahead of itself. Across the cycle, from the pandemic disruption of 2020 to the geopolitical tensions of 2026, one pattern remains clear. When uncertainty reaches its peak, markets begin to stabilize before fundamentals improve. The recovery is driven by early pricing, not lack of risk.
Today, despite rising war risks, inflation and earnings pressures, market reactions are moderating, indicating that much of the fear may already have been ignored. This is not a call for an immediate rise as volatility may persist. However, history shows that markets drive sentiment.
By the time certainty emerges, prices have quietly adjusted and climbed a wall of worry.
