Economy, Business And Markets

TEDPIX Caps Worst Day Since Nov. 30

TEDPIX Caps Worst Day Since Nov. 30
TEDPIX Caps Worst Day Since Nov. 30

The Tehran Stock Exchange (TSE)’s overall index took a dramatic nosedive to register its worst day since November 30, breaking below its psychological barrier of 68,000-point mark at Tuesday’s close.

Stocks at the equity market got thrashed on Tuesday amid concerns about the gloom hanging over the economy, and falling crude prices – now at their five-year lows, weighing heavily on investor sentiment.

Investors are worried about the prolonged slump in the market due to dismal expectations over the next fiscal year’s budget. Given the current downfall at the stock market, investors gathered in front of the TSE on Tuesday to convey their message to the government that a practical action is needed to revive the equity market.

According to TSE data, stocks tanked again amid heightened worries on a rough trading day, with the TEDPIX retreating 761.1 points or 1.12 percent to spook investors.

The first market index tumbled 419.2 points or 0.83 percent to 49,865. The second market index sank 2,428.7 points or 1.18 percent to end at 131,635.2, and record gloomy performance. The free float index plunged 948.9 points or 1.21 percent to stand at 77,219.6. The industry index plummeted 616.6 points or 1.08 percent to settle at 56,641.1, and the blue chip index was down 33 points or 1.08 percent to finish at 3,035.3.

Despite the listed companies’ downbeat performance, a handful of them heavily weighed on the benchmark. Golgohar Mining and Industrial Company recorded the highest volume of trade, and Saderat Bank and Chadormalu Mining and Industrial Company (CMIC) took the second and third place respectively. The CMIC topped the positive contributors to the TEDPIX on Tuesday.

Iran’s Pension Fund and North Drilling Company were other positive contributors to the TSE’s benchmark with 16.55 and 9.79 percent respectively.

On the other hand, the Persian Gulf Petrochemical Industry Company (PGPIC) led the market laggards.  The company left a 243-point negative impact on the overall index. The National Iranian Copper Industries Company (ICIC), as well as Iran Telecommunication Company also squeezed the benchmark.

The global slowdown is also a big culprit in the TSE’s plunge. For instance, since copper hit its lowest price in 4-1/2 years on Monday, the ICIC has dragged down the benchmark by more than 77 points in negative contribution.

The TEDPIX has been recording a series of massive wipeouts since November 12. Considering the prevailing ambiguities over the future of economy, market jitters are expected to keep dragging down the TSE’s gauge.

The TSE’s sentiment is not irregular nor is it on a regular path, with investors overreacting to the economic indicators. It is hard to portray a booming economic situation at least for the mid run.

According to Bloomberg, benchmark US oil prices dropped below $50 a barrel for the first time since April 2009 as surging supply signaled that the global glut that drove crude into a bear market will persist. Hence, since the budget bill proposal is set based on a $72 per barrel, economic gloom is looming large, with the administration encountering a possible budget deficit in the upcoming year(to start March 21).

Ambiguities in the stock market are poised to hurt the average investors, making them mull over taking their money out of the equity market in a bid to hedge their bets. However, given the ongoing plunge at the TSE, nearly all investors have already lost money, while some are keeping shares in the hope of an imminent shift on the TSE’s sentiment.

As market analysts predict, failing to give a boost to the equity market, will keep  stocks retreating. However, the TEDPIX trend depends on a series of substantial contributors, such as the uncertainty over the future of western sanctions, and a lingering recession plaguing the listed industries, to name a few.