Happy Janmashtami. The bull camp appears to have regained its winning ways just as the festive spirits are beginning to escalate here in India. The start promises to be good given the cheerful mood across the globe following encouraging reports on manufacturing output – first in China and then in the US. While people in India form human pyramids to reach a high-hanging pot of butter and break it, the bulls too will team up to help the Nifty break past 5500.

The crucial thing to watch out for is whether the Nifty can sustain above 5500. Just recently it crossed 5500 but failed to extend its ascent. Bulls are of course hoping this time things might be different. But, the precarious and uncertain global situation could continue to play spoilsport every now and then. All eyes are on Friday’s US monthly payroll data, which could swing the sentiment either ways, at least in the immediately short term. The fact that global data points are not consistent will make world markets that much more volatile.

Back home, the Government has revised GDP data (based on expenditures) at market prices to show even better growth. However, if the latest batch of reports are any indication, we could see some softening in India as well. The overall GDP number for FY11 will be fairly robust. The big challenge will be how to tackle an apparent slowdown in key regions like the US, China and euro-zone. Inflation of course continues to be a big issue, and the RBI is likely to continue hiking rates to try and contain it.

The Indian market kicked off the first trading day of September on a high and closed the session with a big bang, as investors snapped up beaten down stocks following the recent reversals. The sentiment got a boost after data showed improvement in China's manufacturing sector output and Australia's GDP growth.

Such good was the bullish undercurrent today that the market ignored reports showing a slowdown in India's manufacturing output and merchandise exports.

The broader market did slightly better and the market breadth was decisively positive. Interestingly, the Auto index on the BSE gained the least despite fairly strong monthly sales volumes. All BSE sectoral indices ended in the positive territory.

Real Estate, Metal, IT and Telecom stocks led the rally along with Consumer Durables, Oil & Gas, Banking and FMCG shares. Capital Goods, Power and Pharma indices on the BSE were rose marginally.

The BSE Sensex closed at 18,205, up 234 points over the previous close. It had earlier been as high as 18,227 and opened at the day's low of 18, 027.

The NSE Nifty closed up by nearly 69 points at 5,471 after touching a low of 5,403 and a high of 5,478. It had opened at 5,403.