Why did the shares in the Indian market correct sharply on Friday 03 January 2020?

The fall was a clear reaction to the US attacks on Iran. Indian markets ended lower on Friday after a US air strike in Iraq killed a top Iranian commander, dampening appetite for risk assets and pushing up oil prices on fears of supply disruptions. The Indian rupee also

plunged sharply by 0.54% to 71.76/$. India, the world’s third-biggest oil consumer but the real issue is that India nearly imports 80% of its oil needs on a daily basis. This makes India highly susceptible to crude price swings. Needless to say, the big losers in the stock market on Friday were oil marketing firms BPCL and HPCL ended 0.83% and 2.15% lower respectively.

Nifty 50 index closed 0.45% lower at 12,226.65 points, while the BSE Sensex closed down 0.39% at 41,464.61 points. One of the clear beneficiaries was gold as investors sought refuge in safe haven assets such as gold. In the Indian markets, the price of gold crossed Rrs.41,000/10 grams taking it to an all time high. However, one of the beneficiaries of the rupee weakness was obviously the IT sector which derives a bulk of revenues from overseas and benefit from a weaker rupee. Tata Consultancy Services closed 2% higher and was the third biggest gainer on the Nifty 50. However, the gold rally was the big story in the market on Friday.