Smalls caps and penny stocks were in upbeat mode in the last trading week ending Wednesday outpacing shares of giant commodity stocks for the second straight week.
However, the main index of Tehran Stock Exchange, the market cap-weighted TEDPIX, posted negative returns and was down 9,000 points or 0.6% during five trading sessions.
The TSE’s benchmark stumbled as most large caps were under sell-side pressure due to a combination of factors, namely decline in the international price of commodities and downturn in domestic currency market, which is often a bane for export-oriented listed companies.
This is while the TSE’s equal-weighted index gained more than 2.3% in the week, a sign that investors were interested in stocks of small-sized listed companies.
Stock market observers link the investor aversion to commodity stocks to the economic impact of political developments that directly or otherwise impacts export-based companies.
The market was buoyed by cautious optimism about prospects of negotiations aimed to revive Iran’s nuclear with world powers.
Observer say success in the talks will cause a broad range of domestic industries to improve, including auto, food, banks and investment companies.
Conversely, a potential accord can impact most commodity stocks and export-oriented companies in the short-term because of its impact on currency rates, which reduce their overseas income.
Retail trade dropped last week after posting a rise a week before. Average daily trade by retail investors stood at 33.03 trillion rials ($113 million) – down 9% on the week before.
The market, however, saw further outflow of capital by retail investors with net capital outflow reaching 6.22 trillion rials ($21.4m) last week, up 44% on the earlier week.
