Stocks Cave in Amid Teetering Economy
Economy, Business And Markets

Stocks Cave in Amid Teetering Economy

The gloom hanging over the economy due to recession, along with systemic and systematic risks at the Tehran Stock Exchange resulted in massive selloffs at the equity market on Sunday trading.
After a 5-day rout at the TSE, stocks kept trashing with unsettled investors lining up to sell the presumed risky stakes, pushing the indices down and so the TSE’s benchmark.
TSE’s gauge marked its 6th consecutive trading day in red territory, with all indices underscoring the fragile atmosphere at the equity market.
According to TSE data, the benchmark shed 642.9 points or 1.01 percent to end at 62,887.3. The first market index slumped 435.7 points or 0.95 percent to 45,413.5. The second market index plunged 1,504.4 points or 1.15 percent to 1.15 percent to 129,523.6. The free float index notched down 702.2 points or 0.97 percent to 72,038.3. The industry index slipped 579.6 points or 1.11 percent to settle at 51,748.7, and the blue chip index also was down 24.9 points or 0.86 percent to 2,904.9.
Despite bearish sentiment at the stock market, trade volume registered a slight surge, underscoring that the stocks that have hit their rock-bottom values are turning into safe haven for veteran investors.
More than 1.01 billion shares changed hands in a sharp downward trading day, valued at around $71.17 million to record close to 15 and 10 percent growth in trade volume and value respectively.
Around 78 percent of stocks underperformed with petrochemicals and oil refining companies, National Iranian Copper Industries Company, Islamic Republic of Iran Shipping Lines (IRISL), and banking sectors leading the market laggards.
Omid Investment Group Corporation with close to 70 points left the most negative impact on the TEDPIX. Persian Gulf Petrochemical Industry Company and Ghadir Investment Company took the second and third place respectively.
The prevailing recession and credit crunch have left the petrochemical industry in dire need of foreign investment, which may not materialize before Iran and the P5+1 fail can hammer out a comprehensive nuclear accord.
Oil refining companies are suffering from oil price fluctuations, sanctions, and ambiguities in feedstock prices.
The global economic slowdown has gripped the copper market, which has kept slashing investors’ expectation about the NICI’s once lucrative yield. However, global copper prices will recover faster than expected with demand outstripping supply within two years rather than the three to four years previously predicted, according to Jean-Sébastien Jacques, Rio Tinto’s head of copper and chairman of the International Copper Association, Financial Times reported.
The bullish forecast comes as the Anglo-Australian miner steps up talks this week with the Mongolian government aimed at finalizing a deal on a $6bn expansion at the Oyu Tolgoi copper mine.
The IRISL downbeat performance is mostly due to the investors’ reactionary manner, which is associated to the stock market’s bearish sentiment.
The banking sector, which is in an alarming state as they hold high levels of toxic debt on their balance sheets, will not be back on track until western sanctions are lifted, allowing them to soak up their frozen assets overseas.


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