Equities on Tehran Stock Exchange fell during the first half of the Iranian year, from March 20 to September 21, as automakers and chemical producers took a beating.
The exchange's main index, TEDPIX, lost 4.7% and ended the first half of the year at 76,450.90 points, according to its website.
Six of the 10 major industries listed on TSE dropped during the period while four industries grew.
Automakers faced the largest losses. The sector as a whole was down 31.7% during the six-month period, according to data provided by the Persian weekly magazine Tejarat-e Farda. Automakers led the rally after the lifting of sanctions against Iran's economy in January, propped up by rumors of deals with foreign counterparts.
According to analysts, the correction was due as the sector had nothing concrete going for them. The automakers had rallied on hype alone.
After the implementation of the deal between Iran and P5+1—the United States, Russia, China, Britain and France, plus Germany—the TEDPIX rallied 35%. Investors were anticipating a boom in foreign investment and economic activity brought about by the normalization of Iran's international relations.
However, fear running afoul of the US Office of Foreign Assets Control, which monitors the execution of US sanctions against Iran, has kept major European banks and companies at bay. Although all sanctions imposed against Tehran's nuclear works were lifted in January, a myriad of US sanctions imposed on other grounds are still in place.
So when dreams of a boom in economic activity were shattered and investors found that reconnection with the global economy would be slow, economic realities set in and the TSE rally came to an end. Without a change in fortunes, most TSE-listed companies are in trouble, because of low consumer demand and the credit crunch brought about by mounting toxic debt on the balance sheets of banks.
The two largest groups in the market, chemical producers and lenders, make up a combined third of TSE, tumbled during the first six months of the year. Chemical producers, which constitute 21.2% of TSE's total market cap, lost 11.7%; while banks and credit institutions shed 4.5% during the two quarters.
Not all industries lost ground. The lifting of sanctions has cut commercial costs considerably and aided the government in stabilizing the crisis-ridden Iranian economy. Telecommunications, basic metal producers, pharmaceuticals and utility providers broke trend and advanced throughout the period.
By far the largest growth came from the pharmaceutical industry benefiting from lower import costs as a result of sanctions relief. Drugmakers defied market trends and surged 18.1% in the six-month period.
Telecoms and utilities added 11.6% and 10.8% respectively, while basic metals gained just shy of 7% for the period.
