Business And Markets

Benchmark Nosedives Amid Panic Selling

Benchmark Nosedives Amid Panic SellingBenchmark Nosedives Amid Panic Selling

Bearish trend kept weighing on the Tehran Stock Exchange (TSE)’s overall index on Monday, with fear gripping investors to extend selloffs, and dragging down the equity market indices once again.

The TEDPIX plunged sharply at Monday’s close to continue the heavy losses of the past 2 weeks, notching a new record low within the past 14 months.

The uncertain direction of stock trading underscored the nervousness that has overtaken investors in the wake of recent wipeout at the TSE. Spooked investors are now taking cash out of the equity market in a bid to try new bets at the rival markets.

The economic impact of the recent oil price freefall, the global economic growth slowdown, and vague prospects over the fate of western sanctions on Iran over its nuclear program have altogether spurred concerns among individual and institutional investors.

As bears dominate the stock market, most of the shares are dramatically undervalued. Since both fundamental and analytical analysts have failed to provide precise estimates of the effects of the dented sentiment, shaky investors find no way out but to garner the stocks that have already hit rock-bottom value.

The sluggish trend of the basic commodities’ trade has also largely contributed to the TEDPIX’s recent dramatic plunge. “Irons ore, copper, and steel trade are at record lows, making the stock markets around the world experience record negative trading days,” Hossein Khezli Kharazi, CEO of Noor-e-Anvar Financial Holding in Tehran told SENA.

Market analysts believe that the equity market is grappling with the supply of poor data and investors’ overreactions. The downward sentiment, however, may change to positive in case of an increase in trade of various commodities.

All indices heavily contributed to the TEDPIX plunge on Monday, pushing the benchmark to record a massive wipeout of 749 point or 1.07 percent, settling at 69,542.6.

According to TSE data, the first market index dipped 681.1 points or 1.32 percent to stand at 50,940.9. The second market index slipped 622.2 points or 0.45 percent to finish at 138,674.8. The free float index plummeted 1,051.3 points or 1.31 percent to end the day at 79,275.9. The industry index slumped 516.4 points or 0.88 percent to 58,475.9, and the blue chip index nosedived 41.1 points or 1.3 percent to stand at 3,117.5.

Despite the benchmark’s sharp freefall, the trade volume and value recorded a slight growth compared with Sunday’s trade. More than 664 million shares changed hands, valued at almost 1.55 trillion rials.

Mellat Bank topped the market laggards with the most negative impact on the TEDPIX. MAPNA Group and Ghadir Investment Company took the second and third place, respectively.

According to the Financial Tribune analysis, the TEDPIX has plunged more than 9.5 percent since November 15, 2014. The unique average Price Earning (P/E) ratio of the stock market, accompanied by the undervalued shares, may entice investors to garner shares within the upcoming days.

According to the latest reports, the Stock Exchange High Council was to formally introduce the Securities and Exchange Organization’s new chief in its meeting on Monday afternoon, a move that is expected to trim the increasing ambiguities at the TSE. Mohammad Fetanatfard is expected to replace Ali Salehabadi as the new SEO chief.