The breathtaking rally in markets continued on Monday with the benchmark indices ending nearly 3 per cent higher, thus logging their best ever two-day gains. Equities have been on fire since Friday after Finance Minister Nirmala Sitharaman announced reduction in effective corporation tax rates to 25 per cent from 35 per cent, earlier.

The benchmark S&P BSE Sensex rallied 1,075 points or 2.83 per cent to settle at 39,090.03, with Bajaj Finance (up nearly 9 per cent) being the biggest gainer and Infosys (down 5 per cent) the worst performer. HDFC duos, ICICI Bank, L&T, ITC and Axis Bank contributed the most to the index's gains.

On NSE, the Nifty50 index ended at 11,603.40, up 329 points or 2.92 per cent. The Nifty Bank index gained 1,566.90 points or 5.41 per cent to end at 30,548.45 levels.

Volatility index India VIX zoomed nearly 11 per cent to 17.05 levels.

Both the frontline indices -- Sensex and Nifty -- have surged 8 per cent in two trading sessions.

Sectorally, IT and pharma counters bled in an otherwise strong market. The Nifty IT index dropped 2.88 per cent to 15,044.70 levels. Similarly, the Nifty Pharma index lost over 2 per cent to settle at 7,810.65 levels.

Shares of consumer companies extended their gains logged on Friday, and jumped up to 11 per cent on the BSE on Monday, on expectation of an improved consumer demand after the government announced sharp cuts in corporate tax rates.

Hindustan Unilever (HUL), Nestle India, Asian Paints, Avenue Supermarts (D-Mart), Bata India, Berger Paints, Titan Company, Voltas and Colgate-Palmolive India were among the notable stocks that hit their respective fresh all-time highs on the BSE today.

In the broader market, the S&P BSE MidCap index gained 434 points or 3 per cent to close at 14,554.46 and the S&P BSE SmallCap index added 361 points or 2.73 per cent to end at 13,565.