Business And Markets

Stocks Slump After 8-Day Rally

Stocks Slump  After 8-Day Rally
Stocks Slump  After 8-Day Rally

The Tehran Stock Exchange’s (TSE) main index (TEDPIX) pulled back from 8 days of rally on Sunday, amid ambiguity over the prospect of a deal in nuclear talks between Iran and the P5+1 group as well as concern spurred over the firms’ six-month reports.

The TSE was on track after a prolonged slump in the equity market; but its benchmark fell down once again to post a fresh decline.

Cautious investors have been waiting for the disclosure of listed companies’ 6-month reports. But there is speculation that these reports have been quite lackluster, discouraging investors from partaking in the equity market again.

The situation in the market is further strained by the upcoming nuclear talks over Iran’s nuclear program, investors in the market are being somewhat overcautious as they feel talks could go either way.

According to the TSE’s website, the market started on its downward trajectory with the TEDPIX falling 211.2 points or 0.28 percent to 73,940.8.

The first market index shed 140.4 points or 0.26 percent to 54,609.4. The second market index fell 513.9 points or 0.35 percent to 144,516.1. The free floating index was down 270.4 points or 0.32 percent to land on at 84,167.6. The industry index dipped 160.5 points or 0.17 percent to 62,374, and the blue chip index marked a fresh drop as it plummeted 9.9 points or 0.22 percent to 3,410.5.

The Oil Industry Investment Company (OIIC) had a huge trade volume as it topped other companies at the Tehran bourse. In addition, financial companies’ stocks stood out, with Tejarat Bank and Saderat Bank taking second and third place respectively.

Considering the trade value, the OIIC hit the top of the board, and Hamadan Glass Company ranked second among other companies.

Pardis Petrochemical Company (PPC) left the most positive impact on the TEDPIX with a 31.61 percent. After PPC, the National Iranian Cooper Industries Company as well as the North Drilling Company had the most positive contribution to the TSE gauge.

The stock market’s downtrend can be attributed to various factors with the most highlighted one being fears over the fate of western sanctions against Iran’s nuclear program.

Recently, officials around the country have been exchanging controversial statements that spur concern in the equity market, over whether the country will be released from the draconian international sanctions restricting the economy.

“Iran will be widely seen to be responsible if a comprehensive deal to curb its nuclear program in exchange for sanctions relief is not reached, the top US negotiator said on Thursday,” Reuters reported.

Due to the practical negotiations between Iran and the P5+1, Wendy Sherman’s controversial statement, was not acceptable at all, which made a top Iranian official respond strongly.

“There is no bright prospect for the conclusion of nuclear talks between Iran and six world powers by November 24 deadline unless the other side abandons ‘illogical excessive demands’ and uses opportunities provided by Tehran,  FNA quoted Abbas Araghchi, Iran deputy minister of foreign affairs as saying.

“As investors have more tendencies to the latest developments in the nuclear talks, a slightest change in the ongoing negotiations will affect the TSE,” Ali Sahraie, the deputy of the TSE’s operation manager told Financial Tribune.

Moreover, the listed companies’ six-month reports were not satisfactory enough to change the investors’ attitude about long term investment in the equity market.

“Although many of the companies’ reports demonstrate that the worst is over, a few of them are still grappling with the ongoing recession and the global fluctuations in raw materials. Furthermore, the reports indicate that some other companies outperformed, which have kept investors in a skittish mood, Keivan Sheikhi, head of the information and statistics department at the TSE told Financial Tribune.

The bottom line, despite the administration’s concrete plan of action to help the country step out of the recession, and the Securities and Exchange Organizations strategic plan to bolster the capital market, doubts remain in this unsettled economy.