Your question can be addressed in five key points as under:

The sharp rally on Friday and Monday were driven by a couple of factors. Firstly, the Finance Minister had announced sharp cuts in corporate cuts from 30% to 22%. Secondly, the government had also announced rationalization of GST rates across key sectors like hotels, hospitality, and the defence sectors, which also helped the markets to rally.

To understand whether this rally is sustainable, look at the quantum of benefits to the companies. The move to cut corporate taxes will release Rs.145,000 crore worth of profit benefits to Indian companies per year. This will directly go into profits of the Indian companies. If you consider this benefit of $20 billion and give it a P/E of 15 times, then you get a value of $300 billion. On a market cap of $2 trillion, this translates into an upside of nearly 15%. Indian markets have already rallied by 10% in two days some more rally is possible.

FII flows could be the key to sustaining this rally. FIIs heavily did short covering on Friday and were buyers to the tune of nearly Rs.2700 crore on Monday. FPIs have been consistent sellers since July and if this marks a turnaround then it could rally the markets much higher.

Growth is an issue because the GDP growth came in at just 5% in the June quarter. However, the tax cuts for new manufacturing could trigger a wave of fresh investments, which could actually translate into much bigger growth in the coming quarters. Markets are betting that the incentives for manufacturing could be a big boost for markets.

Finally, it may be early but this could be the base for markets to rally higher on expectations that growth could follow. However, growth could be the focus on a handful of sectors like banking, capital goods, automobiles, and FMCG. These sectors could benefit a lot more from the recent tax cut announcements. It may not be the time to get bearish at this juncture.