EghtesadOnline: Major Iranian stock indexes vaulted to fresh records on Tuesday, sending the TEDPPIX past the 170,000 mark for the first time.
The milestone came as the rial's misfortunes were reflected in export companies' monthly reports and a string of positive diplomatic and legislative developments boosted investor sentiment.
Tehran Stocks Exchanges' main index, TEDPIX, closed up 5993 points or 3.55% to reach 174,618.2. Stocks rallied as investors flocked to diverse assets and poured more liquidity into the market, Financial Tribune reported.
Stocks extended early gains as the Majlis approved two more bills related to Iran's Action Plan with the intergovernmental anti-money laundering body, the Financial Action Task Force. In midday trading, out of the 428 stocks being traded, 428 or close to 86% were in positive territory. In a sign of small investors' frenzy buying, 200 stocks faced "purchase queues."
According to the stocks analytics website Donyae Bourse, Tuesday's rally was particularly fueled by the monthly earnings reports from petrochemical firms that have seen significant boosts to their rial earnings after the government in August allowed them to sell their hard currency at market rates. In the recent past mineral firms had played such a role.
On the other hand base metal stocks also had a stellar performance on Tuesday with companies like Mobarakeh Steel Company and National Copper Company experiencing higher demand and rise in share prices.
On the diplomatic front and in a major snub to the United States, the European Union announced late Monday that it has decided to set up a new mechanism to enable legal trade with Iran without encountering US sanctions.
Federica Mogherini, the bloc's foreign policy chief said the EU will create new payment channels to preserve oil and other business deals with Iran in a bid to evade US punitive measures.
US President Donald Trump withdrew from a 2015 Iran nuclear deal in May and reimposed sanctions. Mogherini's announcement came after a meeting with foreign ministers from Britain, France, Germany, Russia, China, and Iran on the sidelines of the United Nations General Assembly in New York.
While some analysts say that the fact that investors–oblivious to political risks emanating from the reimpostion of US sanctions– continue to be upbeat about market prospects indicates that the rally is sustainable, others sound the alarm about the longevity of the bull run.
The Persian-language economic newspaper Donya-e-Eqtesad said in an analysis on Tuesday that three warning points should be considered vis-à-vis the recent rally: the extent to which share prices reflect the real earnings reports of companies, policymakers' limits in managing the liquidity in the market and investors' complacency in reaping quick profits without making room for possible price corrections in the future.
Upward Trajectory Continues
Tehran Stock Exchange’s main index gained 5,993.54 points or 3.55% on Tuesday to end trading at 174,618.2.
About 4.94 billion shares valued at $108.7 million changed hands for the day.
Trading at TSE and Iran Fara Bourse starts on Saturday and ends Wednesday.
Niroo Investment Company was the biggest winner as its shares went up 13.45% to 1,619 rials per share.
Damavand Mining Company incurred the biggest loss among all TSE-listed companies and went down 2.44% to 37,530 rials per share.
Persian Gulf Petrochemical Industries Company gave the biggest boost to the benchmark index, followed by Esfahan Steel Company, and Golgohar Mining and Industrial Complex.
Behbahan Cement Co. was the biggest laggard behind the benchmark's fall, followed by Damavand Mining Co., and Iran Carton Co.
The Price Index gained 1,751.77 points to close at 51,035.3.
The First Market Index was up 4,480.23 points to post 128,797.2.
The Second Market Index added 11,627.59 points to reach 347,030.6.
Industry Index increased by 5,516.91 points to register 159,325.9.
Free Float Index was up 6,547.10 points to hit 186,367.96.
The TSE 30 went up 289.71 point to settle at 8,352.8 and the TSE 50 ended 251.45 points higher to finish at 7,478.6.
IFX Up 3.24%
Iran Fara Bourse’s main index IFX gained 63.08 points or 3.24% to close Tuesday trade at 2,012.77.
About 1.1 billion securities valued at $42.57 million were traded at the over-the-counter exchange for the day.
Rail Pardaz Seir Co. had the highest number of traded shares as 57.86 million of its shares were traded.
Zagros Petrochemical Co. registered the highest trade value as $1.95 million worth of its shares changed hands.
Sina Port and Maritime Company, Rishmac Productive and Exports Company, and KBC registered the highest value increase.
Tamin Petroleum and Petrochemical Investment Company, Parsian Oil and Gas Development Group, and Marjankar Co. suffered the biggest decline.
Zagros Petrochemical Company, Esfahan Steel Co., and Middle East Mines Industries Development Holding Company had the most positive impact on IFX.