Nifty likely to bounce towards 4980 levels

After a four-week slide, the Indian markets rose marginally this week as investors bought stocks which were available at cheaper valuations. The Sensex rose 0.40 percent and the Nifty ended the week up 0.59 percent. During the week, the government hiked the petrol price by Rs 7.5 per litre, the steepest till date, in a bold move. Amid the rupee's continuous depreciation and weak market sentiment, the government is likely to soon push some key pending reforms like allowing foreign direct investment in multibrand retail. Should that happen, market participants' perception about policy paralysis of the UPA government is likely to change and may result in a positive fallout on markets. Global cues are likely to provide direction to the market although it may see bouts of volatility since this week is the expiry week. Greece's possible exit from the eurozone remains the hot topic of discussion since an exit is likely to have huge negative repercussions on the global markets as large amount of funds are involved and can have cascading effects on the eurozone countries. Another important data which Dalal Street will be looking out for are India's quarterly GDP numbers, the street is currently estimating the GDP growth to slow down to 6 percent (in the January to March quarter). The data will be announced on May 31. The slower growth in GDP can be attributed to the weak industrial output numbers in March. A slower GDP growth may increase the possibility of a 25bps cut in the repo rate by the RBI in its policy review to be held on June 18. Market outlook Technically, the Nifty formed a "morning doji star" on 24 May on the daily chart, which is a bullish sign in the short term. The Nifty closed on a flat note on Friday at 4,920 levels and is now expected to head upward until 4,980 with support around 4,877 in the immediate run. A key support in the immediate run is around 4,877 and resistance will be faced at 4,956.