Uncertainty seems to have come back to the stock market, triggering irregular behavior at Tehran Stock Exchange all through this week, with unsettled investors lining up to sell risky stakes, pushing the indices down and so the TSE’s benchmark.
As Iran and the six major world powers are negotiating to clinch a comprehensive nuclear deal, mixed and unofficial reports weigh on shaky investors’ decision-making, leading them to get rid of the shares that are more likely to go down, in case Iran and world powers fail to reach an agreement.
Behavioral mistakes like ‘availability bias’ put traders on the edge, and a group of investors tried to sell off shares, bypassing the steps of realizing genuine market jitters, while veteran and institutional investors are snapped up bargains, mulling medium to long term investment.
Behavioral scientists have shown that if something has happened in the recent past, it is cognitively ‘available,’ and people tend to exaggerate the probability that it will happen in the future.
Furthermore, as the oil price has fallen off the cliff, concerns have been raised over the possibility of a budget deficit in the current year and a broad market slump accordingly. However, the government has reportedly taken all required measures to control the upcoming budget deficit to diminish its negative impact on the industries.
Everybody is digesting the concerns, although market analysts claim that the TSE won’t get off the track again, as stocks have hit rock-bottom value, but the market is not grappling with its 2013 bubbly situation.
Long lines to grab newly-debuted shares were evident enough to come to this conclusion that the equity market has its liquidity problems resolved.
The recent Initial Public Offerings (IPO) is another indicator of good atmosphere at the stock exchange, as thousands of investors lined up this week to enjoy high earnings of the IPOs. The move helped the equity market to record tangible growth in liquidity and market cap.
Grey Wednesday
Since the week’s first trading day (Saturday), market indices have initiated a broad wipeout of gains, pushing TEDPIX to come off its record highs within the past 10 days. The market’s main gauge lost 161 points or 0.21 points to keep erasing recent gains, settling at 75,248.4 at Wednesday’s close.
According to the TSE’s data, the first market index tumbled 207.8 points or 0.37 percent to 55,591.5. The second market index managed to stay in green, gaining 268.3 points or 0.18 percent to stand at 146,962.3. The free floating index slipped 198.4 points or 0.23 percent to 86,629.3. The industry index was down 94.9 points or 0.15 percent to finish at 62,814.6, and the blue chip index fell 12.3 points or 0.36 percent to end at 3,448.7.
The good news, however, was that the trade volume and value recorded fresh growth at Wednesday’s close. Almost 965 million shares were traded, valued at nearly 2.3 trillion rials.
Mobile Telecommunication Company of Iran topped the positive contributors to the TEDPIX, with a 62.3 percent. Pars Khodro stood next with 35.02 percent. However, Omid Investment Group Corporation and Persian Gulf Petrochemical Industry Company made the most negative contributions to the TSE benchmark’s fall.
