Stocks crumpled at Tehran Stock Exchange (TSE) at Wednesday’s close, with the TEDPIX plunging in bear market territory as the majority of the stocks took it on the chin in the face of escalating fears over a possible credit crunch in the coming months.
According to TSE data, the overall index kept tanking at the week’s last trading day, with almost 80 percent of the listed companies recording downbeat performance.
The TEDPIX shed 569 points or 0.84 percent to register a new record low at 66,902. The first market index plummeted 246.8 points or 0.49 percent to end at 49,618.4. The second market index nosedived 2,255 points or 1.71 percent to settle at 129,379.8. The free float index tumbled 565.6 points or 0.73 percent to 76,654. The industry index went down by 538.5 points or 0.95 percent to finish at 56,102.6, and the blue chip index slipped 18.3 points or 0.6 percent to 3,017.
More than 655 million shares, valued at 1.84 trillion rials, changed hands at the equity market. The TSE was also witnessing Saderat Bank’s creation units, which managed to lift the benchmark with more than 28-points positive contribution.
Given the deteriorating impact of the Persian Gulf Petrochemical Industry Company (PGPIC) on the overall index within the past few days, the PGPIC could be termed as the ‘stock market’s laggard’ with more than 219-points negative contribution on the TEDPIX.
Tamin Petroleum & Petrochemical Investment Company, and National Iranian Copper Industries Company took the second and third place with almost 67 and 39 points negative contribution on the TSE’s gauge.
Dramatic free-fall of crude prices, accompanied by an imminent budget deficit keep slashing the expectations on the listed companies’ performance for the upcoming quarters.
According to MarketWatch, oil future extended its sharp downhill march on Wednesday, after briefly turning upward following US crude-inventory data that showed a surprise drop in weekly oil supplies. Earlier in the European trade, London-traded North Sea Brent crude for February delivery had briefly dipped below the $50-a-barrel mark for the first time since May 2009.
The TSE’s benchmark is breaking barriers one by one, and keeps spurring concern among both individual and institutional investors.
Limping economy, dismal outlook for the upcoming year, dramatic crude nosedive, and the anticipated squeezed budget heavily weigh on the TSE’s sentiment.
Considering the unprecedented ongoing negative sentiment at the equity market, which squeezed a variety of shares including the high yielding ones, some investors changed their trading approach.
With stock prices swinging, the veteran investors turned to scalping, trying to snap gains in time of stress. However, it has always been recommended to have a long-term approach to the stock market.
Bears are reigning at the equity market and the administrators have kept silent. This is while in light of the gloomy atmosphere and the lost anticipation for earnings in the next year fiscal budget, a concrete action- at least in the short run- would be hard to imagine.
When it comes to trade in such a red market, the investors are strongly urged to observe diversification, and keep patient. Although as a rule of trading, investors should be always alert regarding the rival markets in a bid to hedge their bets.
