Best week in four years may be a setup for a possible fall on tariff deadline: Nirmal Bang's Rahul Arora

In today's session, the market’s fiery run continued, with the Nifty locking in its best weekly performance in four years, soaring 4.27 percent — the highest since February 2021, when it had surged 9.46 percent in a week.

A short-term bottom may be in place, but a sustained rally remains uncertain as investors position themselves ahead of the crucial April 2 announcement on reciprocal tariffs by U.S. President Trump, Rahul Arora, the CEO of Nirmal Bang Equities told CNBC TV-18 in a conversation on March 21.

"The market may actually be prepping itself for a negative reaction on April 2. You're rallying now so that you don’t fall further from there," Arora said, adding that even if a correction follows, the recent low of 21,800 may act as a floor.

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The Nifty’s recent dip below 22,000 aligned with widely-held expectation of the correction bottoming out in the 21,000-22,000 range. However, quarter-end NAV management, insurance flows, and fiscal year-end portfolio adjustment could influence the market trend, Arora said.

Rahul Arora remains cautious of earnings prospects for FY26, particularly in banking, IT, and consumption. While banking has rallied after a prolonged lull, overall earnings growth for the sector is expected to be in the 13-14 percent range, driven more by non-banking financials. The broader market sentiment too reflects this muted outlook, he said.

Defence stocks, which had corrected sharply in recent downtrend, had seen buying interest, possibly in anticipation of the Rs 54,000 crore orders announced recently. Meanwhile, index drivers such as Reliance, IT, FMCG, and banking stocks will need to participate meaningfully for any sustained upside in the market.

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For now, all eyes are on April 2, with the market walking a fine line between short-term support and the risk of another drawdown.

In Friday’s session, the market run up continued with the Nifty locking in its best weekly performance in four years, soaring 4.27 percent —highest since February 2021. The Sensex wasn’t far behind, posting its best week since July 2022, with a 4.2 percent gain underscoring market’s momentum.

The Nifty breached 23,400 intra-day for the first time in two months before closing at 23,350, up 160 points. The Sensex roared 557 points higher to 76,906, while the Nifty Bank surged 531 points to 50,594. Broader markets kept pace, with the Midcap index jumping 706 points to 51,851 as investors chased opportunities beyond blue chips.

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