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Indices Settle in Red Territory

Indices Settle in Red TerritoryIndices Settle in Red Territory

After the TEDPIX's broad rallies within the past 10 days, indices lost steam, wiping out part of the recent gains on the week's first trading day, failing to continue pushing the market's benchmark into green.

The Tehran Stock Exchange (TSE)'s gauge came under pressure again on Saturday, losing 642.8 points or 0.84 percent to record a negative trading day, after the mixed news on the outlook of nuclear talks between Iran and the P5+1 triggered some investors to retreat from the equity market.

"Some P5+1 officials, including Russians, have expressed doubts a deal can be reached before the November 24 deadline," Reuters reported.       

According to the TSE’s website, first market index lost 625.3 points or 1.1 percent to erase most of its gains in the past few trading days to settle at 56,139.7. The second market index was down 264.4 points or 0.18 percent to end at 148,113.6. The free floating index tumbled 1,072 points or 1.22 percent, closing at 87,057.9. The industry index, for its part, dropped 313.6 points or 0.49 percent to 63,500.9.  

During the past two weeks, the TSE witnessed successive increases in trading volume and value due to the lucrative features of the market portrayed for both traditional and new investors.

Despite Saturday’s benchmark fall, trading volume and value rose compared to Wednesday, demonstrating that the bull market is far from over. Based on the TSE’s data, more than 1.25 trillion shares were traded, worth almost 3 trillion rials at Saturday’s close.  

Nearly all of the high-yielding companies’ shares ended negative on Saturday, with the financial groups leading the losses. Mellat Bank, which offered some of the most worthwhile shares within the past few days, left the most negative impact on the TEDPIX. Pasargad Bank and Saderat Bank were other laggards to the TSE’s benchmark.

Barez Industrial Group, a leading tire and rubber manufacturer, topped the positive contributors to the market’s trend with a 37.86 percent. Tosee Meli Investment Company as well as Kavian Steel Company were, respectively, the second and third positive contributors.

Launching Initial Public Offerings (IPOs) at the TSE was accompanied by selloff lines formed for buying other shares as investors vied for the interesting IPOs.

Market analysts have been expecting a downtrend upon launching the IPOs, while the speculations over the prospect of the removal of western sanctions against Iran over its nuclear program also weighed on the TSE’s downtrend on Saturday.

Shaky investors have been also perturbed that the Republican victory in the US mid-term elections may make it harder for Iran and the West to reach a comprehensive nuclear agreement.

Unsettled investors are still worried about latest reports on the nuclear talks; these reports may not drastically shift the market’s trend, though they may briefly push the benchmark down. Irregular behavior of investors has been always a negative aspect of the equity market around the globe, and the TSE is no exception.

No matter whether the market is booming or bursting, the investment results are more dependent to the investors’ behavior than the market’s sentiment or even fund performance.

As was announced by TSE director, Hassan Ghalibaf-Asl, launching IPOs will continue within the upcoming days, and the markets’ liquidity may keep going up as a result. But as an undeniable fact, the TSE is vulnerable to the unofficial reports, though as most market analysts predict, it may not experience another crash anytime soon.

 

Financialtribune.com