The market has rebounded by ~8% from the recent lows of 7540 to ~8150 currently. This was led by the positive surprise from RBI, which announced a repo rate reduction of 50 bps to 6.75%, continuing the front loading of rate cuts. Furthermore, it also derived confidence from better fiscal deficit numbers for first five month of FY16. Going ahead, we believe earnings would be the key driver for market movement. 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) with a negative bias on metals, infrastructure and real estate. We expect Sensex earnings to grow at 13 2% and 18 5% 13.2% 18.5% in FY16E and FY17E to Rs. 1539 and Rs. 1838, respectively. We assign a P/E of 16.5x on FY17E EPS to arrive at a fair value of 30300 by September 2016 with the Nifty reaching 9100.