Gold Price, Currency and Equity Markets: All you need to know about

Gold prices corrected gradually during the first half of the session till a low of Rs 48874 yesterday. However, prices did not sustain at lower levels and rose strongly for the remaining session till a high of Rs 50060. Prices have been rising strongly since last week as mounting Covid-19 cases and fresh restrictions boosted hopes of a US pandemic stimulus package. Hence, ICICI Securities believes gold prices will rise further towards Rs 50400 level in the short-term.
 
US$INR December futures depreciated, again moved above 74 levels despite continued inflows in the equity market. ICICI Securities still believes higher levels of 74.20 should stay immediate resistance and can be utilised for shorting the pair. The dollar-rupee December contract on the NSE was at 74.05 in the last session. The open interest remained almost unchanged for the December series contract.
 
The Nifty continued its upward momentum and closed at lifetime highs led by financials, pharma and select FMCG stocks. On the options front, 13100, 13200 Put holds significant OI that should act as support on the downsides. However, maximum Call OI is at 13500 strike that should be an immediate hurdle on the upsides. Nifty futures ended at a premium of 32 points yesterday while IV remained unchanged. The major Put base is at 13200 strike with almost 36 lakh shares while the major Call base is at the 13500 strike with almost 30 lakh shares.
 
On Monday, after a negative start, the Bank Nifty made a low of 30021 and then stayed sideways for most of the day. In the second half, a recovery in SBI and midcap banks led the index higher to end in the green. The ongoing uptrend could continue in the Bank Nifty with an intermediate support level of 30000.
 
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Equity benchmarks started the week on a buoyant note and settled at fresh record highs extending gains for a fifth consecutive session. The Nifty ended the session week at 13356, up 98 points or 0.7%. The market breadth remained strong with an A/D ratio of 2.6:1 as the Nifty midcap and small cap relatively outperformed the benchmark. Sectorally, all major indices ended in green led by pharma, FMCG and financials. The daily price action formed a bull candle carrying a higher low over sixth consecutive session and scaled a fresh all-time high (13367), indicating continuance of positive bias as the index witnessed follow through strength to the brief consolidation breakout (13200-12800) recorded in Friday’s session.
 
Going ahead, ICICI Securities reiterates their positive stance as we head towards our target of 13600 in coming weeks. We believe the index remains on a strong footing as it continues to stride northwards in a rising peaks and troughs pattern. In line with our view, traction is seen in banking stocks, leading the banking index to settle at 10 months high. The current up move is led by broad based market participation as the Nifty midcap and small cap indices have consistently outperformed the benchmark and rallied 3.5%, each, so far this month against gain of 3% on the benchmark Nifty, after resolving out of their long term falling channel breakout, indicating resumption of major uptrend. The rejuvenation of the broader market rally has been supported by strengthening of market breadth, as currently 97% components of Nifty midcap and small cap indices are trading above their long term 200 days SMA compared to past two week’s reading of 90%.