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Gold Slips, Stocks Slumber

Business & Markets Desk
Gold Slips, Stocks SlumberGold Slips, Stocks Slumber

Iranian stocks remained in slumber while the dollar sank to a six-week low against the rial due to rising oil prices during the past week. This is while Azadi gold coin got knocked off its highest in over two years.

Iranian weekdays end on Friday.

Crude oil has fallen since markets closed in Tehran. A reversal in dollar's value may be in store on Saturday's open in Tehran, depending on how global markets finish Friday.

As for equities, another quite week passed, with volatility falling and indices moving less that 0.5% each day. Volume, however, kept steady, with around one billion shares changing hands each day.

Enthusiasm for stocks has waned since their rally in mid-January following the lifting of sanctions against Iran. Political infighting over the deal, which saw their lifting in exchange for curbing Tehran's nuclear works, among the state's top brass and reluctance of international companies for fear of running into remaining US restrictions have deflated much of the hype.

Stocks on Tehran Stock exchange have edged lower for 12 straight days. TSE's main index, TEDPIX, finished the week 371 points or 0.04% lower and closed at 78,033 points on Wednesday.

The Iran Fara Bourse over-the-counter market was also in slumber this week. IFB's benchmark, IFX, rose a meager 2.5 points on Saturday, but changed direction on Sunday and slid to Wednesday's close.

You could erase this week from history and no one would know. The IFX finished 2 points or 0.02% lower at 798.49 points.

Meanwhile, the rial advanced against the greenback as oil prices rose throughout the week. The dollar lost 0.03% to 34,450 rials.

> Gold Knocked Off Record

Gold coins also fell in Tehran this week as bullion fell in international markets on weaker global equities, but held below a 15-month peak as the dollar rebounded against the yen after a recent slump.

In Tehran, benchmark gold coin, Azadi, sold for 10,340,000 rials on Thursday, 1.2% off its highest in over two years. Azadi hit its record high of 10,470,000 per coin twice last week, before international headlines caught up with it, Eranico website data show.

However, trade volume in the foreign exchange and gold market has dropped markedly since the currency crisis in 2012 and remains subdued, most bureaux de change owners say.

> Main Focus

Oil will be the main market focus next week. The Iranian government derives most of its income from its sale and over 40% of companies listed on Tehran's equity markets are petroleum related, from refiners and petrochemical producers to holdings with high stakes in the industry.

Oil prices fell on Friday, as investors cashed in on a 20% rise over the past month, outweighing the impact of crude production cuts in Canada where a huge wildfire has disrupted oil sands operations.

Oil prices were down around 1% in early European trading, with global benchmark Brent prices set for their first weekly loss in five weeks.

"Currently prices are falling even with only few bearish fundamentals," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.

Brent crude prices have risen 64% since a near 13-year low reached in mid-January and as much as 20% over the past four weeks.

Brent futures LCOc1 were down 24 cents at $44.77 a barrel at 0848 GMT. WTI futures CLc1 traded at $44.07, down 25 cents day-on-day.

The dollar, which has a huge impact on greenback-denominated commodities like oil futures, was also on track for a weekly gain. This in turn weighed down oil prices.

Rising oil prices mean more fiscal spending and less deficit for the Iranian government.

 

Financialtribune.com