Stocks extended their rally for the 11th day, capping their largest daily gain since October 17, as speculations on relations improving with the international community lured in traders on Wednesday.
Stocks on the Tehran Stock Exchange had dilly-dallied for days but trading picked up in the past two days bringing the main index, TEDPIX, up to a five-week high of 62,632.8 after a 0.93% uptick on Wednesday.
Rumors that the SWIFT global interbank network's ban on dealing with Iranian banks is about to be lifted as a start to the rollback of sanctions drove up demand for financials from midday.
Also, meetings between Iranian automakers and foreign delegations led to speculations that deals had been made.
Market experts, however, believe the rally will be short-lived, as market fundamentals have not changed.
"Most of the movement comes from speculative stocks, especially those on the Iran Fara Bourse over-the-counter market. Market heavyweights have barely moved," Ali Khosroshahi, a senior analyst at Amin Investment Bank, told Financial Tribune.
"Market fundamentals have not changed a bit. The rally is mainly due to changes in expectations and may very well be temporary," Reza Qahremani, Maskan Investment Bank's head of asset management said in a phone interview. "These rumors may brighten short-term outlook, but the long-term future looks bleak."
The rally may become a sign of more positive expectations in the market.
"If the rally in banking shares continues on Saturday, we can assume traders are viewing the market more positively," said Khosroshahi.
Trading volume was also highest since July 13. Over 2.1 billion shares valued at $88.8 million rials changed hands to file a nearly 300% and 190% growth in daily trade volume and value compared to Tuesday.
The Price Index surged 223.80 points or 0.93% to end at 24,293.3.
The First Market Index gained 524.70 points or 1.24% to reach 42,996.6.
The Second Market Index stepped up 554.50 points or 0.39% to register 141,827.5.
The Industry Index was up 383.60 points or 0.75% to record 51,643.
The Free Float Index rose 834.33 points or 1.22% to hit 69,300.80.
The TSE 30 Index added 38.40 points or 1.48% to settle at 2,627.6.
And the TSE 50 Index gained 25.60 points or 1.02% to close at 2,531.2.
Over 60% of the listed companies worked in favor of the benchmark.
Parsian Oil and Gas Development Company, with a P/E ratio of 5 and 82.36 points, gave the biggest boost to TEDPIX, followed by MAPNA Group and Bank Saderat with 66.49 and 39.62 points respectively.
Chadormalu Mining and Industrial Company was the biggest market laggard with 11.33 points. Khorasan Steel Company and Behshahr Industrial Company followed with 8.7 and 8.42 points respectively.
> IFX on the Rise
Iran Fara Bourse’s overall index IFX added 8.6 points or 1.2% to settle at 702.
According to IFB, more than 429 million securities valued at $25.8 million changed hands in 34,000 transactions to register a 170% and 12% rise in daily trade volume and value compared to Tuesday’s figures respectively.
Hormozgan Steel Company registered the highest trade volume of the day with the transaction of 50 million shares.
Bahman Diesel Company recorded the highest trade value with $2.9 million worth of shares changing hands.
Ghasem Iran Distribution Company, Iranian Petrochemical Investment Company and Shirvan Sugar Company were also on investors’ radar.
Bahman Leasing Company and Ravan Fanavar Engineering Company filed the highest growth and decline in shares’ value respectively.
Iranian Petrochemical Investment Company, Tehran Oil Refining Company, and Marun Petrochemical Company provided the biggest boost to IFX.
Etemad Fund, with the transaction of 2.8 million shares, valued at over $944,444 registered the highest trade volume and value amid listed exchange-traded funds. Some 56,569 Islamic treasury bonds were also sold out.
