The second wave of coronavirus infections has hit India harder, with new cases rising every day. To curb the resurgence, state governments have imposed stricter restrictions. These curbs, though milder than last year so far, have begun to limit mobility and affect business activity. The impact would be reflected in India’s gross domestic product (GDP) growth in the coming quarters, and analysts have begun pruning expectations.

Still, this pessimism hasn’t caught up with the equity market so far. From its all-time high of 15,431.75 seen in February, the Nifty50 index is down by about 7%. Fear gauge Nifty volatility index (VIX) is currently at 23, much lower than the intra-day high of 86 levels it touched in March last year. Compare this with the massive drop in indices last year.