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Stock futures up 4% on fresh buying

This article was posted on Nov 4, 2008 and is filed under Market News

MUMBAI: Stock futures ended higher on Tuesday, swinging to premium to the spot market, as investors built fresh long positions in the Nifty and stock futures of banking, realty and infrastructure firms. Traders said there was short covering seen in some bank stocks, but positive momentum built up in the afternoon after the finance minister P Chidambaram..said that state-run banks would pass on easy liquidity and rate cuts to their small and medium business sector customers.

The Reserve Bank of India on Saturday announced a cut in its main short-term lending rate by 50 basis points, and in cash and bond reserve requirements, to shore up the economy against a global recession.

“The bull run is basically a pullback rally. People are taking position in the futures for a short-term,” said an analyst at a Mumbai-based brokerage. The Nifty November futures closed up 3.83 per cent at 3,161.90, with a premium of 19.80 points to the 50-scrip Nifty index, which closed up 3.23 per cent at 3,142.10 points. On Monday, it ended at a discount of 1.4 points.

“Interest-rate sensitive stocks such as banking and real estate added a huge open interest today, while fresh shorts were seen in the software,” Savio Shetty, derivatives analyst at Prabhudas Lilladher said. Suzlon Energy added open interest of 50 million shares in the derivatives segment. The stock closed 20.6 per cent higher in the cash segment.

Analysts said the markets may have a negative bias for the next couple of sessions until the results of the US presidential election are known. Resistance for the Nifty is pegged at 3,200 point whereas an interim support is seen at 2,900 level, an analyst said

source: Economictimes

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