Tracking global markets, share prices in both Tehran Stock Exchange and over-the-counter Iran Fara Bourse took a beating on Monday.
TSE’s market cap-weighted index, TEDPIX, shed more than 14,800 points and closed the session 2.7% lower. Equal-weighted index dropped 1.91% to indicate smaller losses in small-cap companies.
Downturn in Tehran’s stock market started on Saturday amid increasing uncertainty among investors over the market regulator’s arbitrary decisions, and gained pace on Monday as an obvious response to trends in global markets.
The sell-off particularly hit petroleum-based stocks in refinery and chemical groups before extending to almost all other stocks throughout the trading session.
Steep decline in crude oil prices triggered a massive sell-off in refinery shares in the very beginning of trading session on Monday.
Global share markets tumbled on Monday as panicked investors fled headlong to bonds to hedge the economic trauma of the coronavirus, and oil plunged more than 30% after Saudi Arabia opened the taps in a price war with Russia, according to Reuters.
A climate of uncertainty has gripped the stock market since Wednesday evening when market regulator, the Securities and Exchange Organization, in a rare move said that it will further tighten the cap on price spread to 2% daily compared to 5% now.
SEO officials backed the abortive decision by linking it to protecting investors and fighting speculative activities that has led to unjustified increase in share prices.
They also referred to astronomical growth in the market over the past months, arguing that the sharp rise in stock market indicators is incongruent with Iran’s economic reality.
Although the decision was later nullified temporarily by Economy Minister Farhad Dejpasand , its side-effects are continuing to beat the market as investors are perturbed by possible intervention by the regulator to tamp down unreasonable market growth.
The market has grown three times over the course of one year since March 2019.
Market Performance
The TSE's main index TEDPIX lost 14,805.54 points, or 2.7%, on Monday to end trading at 534,379.5.
About 5.78 billion shares valued at 37.31 trillion rials ($243.92 million) changed hands at TSE for the day.
Trading at TSE and the OTC market Iran Fara Bourse starts on Saturday and ends Wednesday.
Glucosan Company (food manufacturer) was the biggest winner as its shares went up 66.86% to 5,408 rials per share.
Bama Mining Company incurred the biggest loss among all TSE-listed companies and went down 10.36% to 29,601 rials per share.
Mobarakeh Steel Company contributed the most to the benchmark's fall, followed by National Iranian Copper Industries Company, Golgohar Mining and Industrial Company and Mellat Bank.
Glucosan Company gave the biggest boost to the benchmark index, followed by Padide Shimi Gharn Company, Behshahr Industrial Development Company and Mellat Investment Bank.
The Price Index lost 3,946.56 points, or 2.70% to close at 142,451.4.
The First Market Index went down 12,268.94 points, or 3.16% to post 376,438.1. Second Market Index was down 23,387.18 points, or 2.01% to reach 1,140,306.5.
The Industry Index lost 12,876.66 points or 2.61% to register 480,746.3. The Free Float Index was down 21,591.54 points to hit 675,922.17.
TSE 30 went down 740.81 points to settle at 21,209.0 and the TSE 50 ended 569.16 points lower to finish at 19,578.4.
IFX Down 2.1%
Iran Fara Bourse main index IFX lost 147.88 points, or 2.1%, to close Monday trade at 6,893.77.
About 1.85 billion securities valued at 20.27 trillion rials ($132.54 million) were traded at the over-the-counter exchange for the day.
Shahid Tondgooyan Petrochemical Company had the highest number of traded shares as 213.99 million of its shares worth 937.29 billion rials ($6.12 million) were traded.
Gohar Zamin Iron Ore Company, Esfahan Steel Company, Middle East Mines and Mineral Industries Development Holding Company and Marun Petrochemical Company had the most negative impact on IFX.
Damavand Power Generation Company gave the biggest boost to IFX, followed by Chlor Pars Company, Shahid Tondgooyan Petrochemical Company and Day Bank.
