Gold Price, Indian Rupee and Equity Markets Today: Precious metal at high of Rs 50170, INR near low of 73.67 | Here is all you need to know

Gold price did not sustain at lower levels and recovered strongly for the remaining session till a high of Rs 50170. Gold price has been rallying strongly in the last more than one week as investors pinned hopes on a US fiscal stimulus deal to cushion the economic blow from surging Coronavirus infections. Therefore, ICICI Securities expect gold price to rise further towards Rs 50400 in the short-term.
 
Indian rupee vs US dollar (US$INR) December futures appreciated sharply in the last session and made lows near 73.67. ICICI Securities continue to believe that higher levels should remain a shorting opportunity considering continued FII flows in emerging markets. The dollar-rupee December contract on the NSE was at 73.74 in the last session. The open interest increased marginally by 2.98% for the December series contract.
 
The Nifty ended positive yesterday led by financials, technology and select cement stocks. On the options front, 13100, 13200 Put holds significant OI that should act as support on downsides. However, maximum Call OI is at 13500 strike that should be an immediate hurdle on upsides. Nifty futures ended at a premium of 35 points while IV rose by 3%. The major Put base is at 13200 strike with almost 32 lakh shares while the major Call base is at the 13500 strike with almost 39 lakh shares.
 
The choppiness in private banking stocks continued as leading private banks again slipped from higher levels. However, most PSU banks witnessed long additions. On the weekly options front, it has significant OI at 30000 Put and major Call OI at 30500. The ongoing uptrend could continue in the Bank Nifty with an intermediate support level of 30000.
 
ICICI Securities believes with pharma companies lining up to seek emergency authorisation for vaccines, countries are gearing up for a mass immunisation programme. ICICI Securities believe this would set the stage for a comeback for sectors that were primarily affected such as tourism, entertainment, real estate, building materials, malls, etc. The arrival of vaccines would reinstate positive sentiments in these sectors.
 
Technical Outlook:
 
The daily price action formed a high wave candle carrying higher low, indicating continuance of positive bias amid rise in volatility. The index pared initial gains led by minor profit booking in recently run up stocks. However, intraday correction was short lived as supportive efforts emerged from intraday support of 13300, indicating elevated buying demand
 
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Going forward, ICICI Securities maintain a positive stance on Nifty with a target of 13600 as bias will continue to remain positive as long as higher high-low is maintained. Meanwhile, we expect stock specific action to remain in focus and expect Midcap and small caps to relatively outperform
 
ICICI Securities expects cyclicals to outperform lead by banking. Since the constituents of the banking index constitute 33% weightage in the benchmark Nifty, they believe further acceleration of upward momentum in banking stocks would drive the Nifty higher and extend the current up move towards 13600. The broader markets maintained their uptrend as the Nifty midcap and small cap indices have consistently been marching northward after resolving out of their long term falling channel breakout and closed at two years high. 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%, that augurs well for durability of the ongoing rally.