Domestic markets cracked by 6.5% in August owing to global uncertainty led by fears on China’s slowdown, Yuan devaluation, an impending currency war risk along with a Fed rate hike. Domestic factors such as lower-than-expected Q1FY16 GDP growth and higher rainfall deficit for August also added to the woes. From a sectoral perspective, we are positive on auto, cement and capital goods (cyclical recovery in earnings aided by lower input costs and declining interest rates will provide strong operating and financial leverage). We also have a positive outlook on the IT and pharma space (given their quality of earnings) while we are negative on metals, infrastructure and real estate. Going ahead, we expect Sensex earnings to grow at 13.2% and 18.5% in FY16E and FY17E to Rs. 1539 and Rs. 1838, respectively. Hence, we assign a P/E multiple of 16.5x on FY17E EPS to arrive at a fair value of 30,300 by September 2016 with the Nifty reaching 9,200.