Tehran Stock Exchange's main index, TEDPIX, lost 1,603.50 points or 2.01% to settle Saturday trade at 77,984.8.
Analysts believe the plunge came after remarks made by the governor of Central Bank of Iran in Washington about obstacles to repatriating the country's frozen assets. They also cite falling commodity prices and the "popping of a bubble" in the auto sector for Saturday's collapse.
On Friday, CBI Chief Valiollah Seif called on the administration of President Barack Obama to do more to facilitate Iran's banking transactions worldwide and warned that the landmark nuclear agreement reached last year could be at risk if the US does not act.
Iranian banks have been unable to process international money transfers and finance trade freely in the months since the deal went into effect in January.
Iran has also faced obstacles to retrieving tens of billions of dollars of oil revenues that were frozen in overseas accounts under US sanctions. Some western banks have acknowledged avoiding dealings with Iran due to fears of crossing the US Treasury, The Wall Street Journal reported.
“They need to do whatever is needed to honor their commitments,” Seif said during a 90-minute presentation that came on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington on Friday.
”Otherwise, the [Iran nuclear deal] breaks up under its own terms,” he said.
Iran agreed to scale back its nuclear program in exchange for relief from international sanctions that hurt its economy, as part of the July 14 nuclear deal struck with world powers, including the United States. The UN nuclear agency confirmed that Iran had complied by its side of deal in mid-January, which marked the end of western sanctions regime against the Islamic Republic.
> Auto Factor
Meanwhile, the auto industry, with the highest market cap ever since the lifting of sanctions, popped its price bubble on Saturday, heavily affecting the benchmark, according to Ali Khosroshahi, a senior analyst at Amin Investment Bank.
"Rumors, and not actual developments, boosted the auto industry. And the market reached a point where systematic risks could no longer allow it to grow, leading to price corrections," said Ali Khosroshahi, a senior analyst at Amin Investment Bank.
Auto companies have been buoyed by news of foreign auto giants wanting to enter the Iranian market for investment ever since the lifting of sanctions. Many of these foreign companies, however, are yet to sign agreements with their Iranian counterparts, while others, it turned out, never planned to engage in the first place.
Iran Khodro Industrial Group is yet to sign an agreement with Mercedes-Benz, which is said to be going to take place in the first half of the current Iranian year (started March 20), according to IKCO's CEO Hashem Yekezare.
IKCO's joint venture with Peugeot is also scheduled to be finalized next summer, with production starting in 2017. Furthermore, partnerships with Fiat and Volkswagen have not yet been confirmed by the European firms' respective officials.
Auto manufacturers unanimously posted losses to the tune of 5% on average, with Iran Khodro and SAIPA–Iran's two largest automakers–staging a particularly downbeat performance.
Khosroshahi added that since the performance of more than half of the TSE-listed companies is tied to global commodity prices, the still-declining metal and oil prices have prevented many related listed industries from making gains.
However, according to managing director of MES Brokerage, Ali Asgharzadeh, the adverse factors are not here to stay and the market is expected to be back on track in the upcoming Iranian month (starting April 20).
He described the poor market performance as "reactionary" and said the approval of the budget bill, especially construction spending for the current Iranian year, will return confidence to investors.
> TSE, IFB Reports
The TEDPIX was mostly dragged down by large-cap industrial holdings, banks, oil and gas companies.
More than 87% of the listed companies posted heavy losses for the day. Textile, auto manufacturing and food companies incurred the heaviest losses.
According to TSE data, over 788 million shares changed hands valued at $74.3 million, with the number of shares traded and daily trade value nearly halved compared to the prior trading day.
Iran Polyacryl Company was the day's biggest loser as its shares plunged 19.48% to 3,994 rials each, followed by Saipa Diesel Company and Pars Minoo Company.
Tamin Oil, Gas and Petrochemical Investment Company was the day's biggest winner, as its shares went up 5% to 2,541 rials each. Bafgh Mining Company and Ardakan Industrial Ceramics Company came next.
MAPNA Group with -111.2 points was the biggest laggard behind the benchmark, followed closely by Bank Mellat and Parsian Oil and Gas Development Company with -110.3 and -106 points respectively.
Persian Gulf Petrochemical Industries Company, with 130.9 points, provided the biggest boost to the benchmark. Omid Investment Company and Pension Fund Investment Company came next with 30.59 and 23.78 points respectively.
The Price Index lost 609.60 points or 2.01% to end at 29,651.
The First Market Index shed 1,460.10 points or 2.61% to close at 54,406.2.
The Second Market Index gave up 1,495 points or 0.86% to post 171,532.
The Industry index withdrew 1,153.40 points or 1.74% to settle at 65,190.2.
The Free Float Index recorded the biggest decline among all indices, as it plunged 2,490.20 points or 2.74% to reach 88,479.50.
The TSE 30 Index was down 97 points or 2.93% to register 3,217.9 while the TSE 50 Index lost 67.20 points or 2.10% to rest at 3,139.
At Iran Fara Bourse's over-the-counter market, the main index IFX wiped 22.11 points or 2.79% to stop at 769.08.
According to IFB data, 257 million securities valued at $33.2 million were traded in 24,000 transactions, with daily trade value down over 50% compared to Wednesday.
Bank Day posted the day's highest number of shares traded, as 25.2 million of its shares changed hands, while Damavand Electricity Company recorded the highest daily trade value, with $2.2 million of its shares transacted.
Minoo Industrial Company, Gostaresh Tejarat va Sarmayeh Iranian and Kimia Zanjan Gostaran Company Mining and Industrial Company had the highest increase in share value.
This is while Yazd Steel Alloy Company, Niroo Sarmayeh Company and Pardis Housing Investment Company posted the highest declines.
Marun Petrochemical Company, Tehran Oil Refining Company, Iranian Petrochemical Investment Group and Middle East Mines and Mineral Industries Development Holding Company weighed most on IFX.
Kosar Fund, with the transaction of 1.5 million shares, registered the highest trade volume among listed exchange-traded funds. Moreover, 101,000 murabaha bonds of Mega Motor were sold out.
