EghtesadOnline: Massive selloff, the market’s corrective response to earlier gains, and a bearish global market pulled the main gauge of Tehran Stock Exchange down on Tuesday to record another fall in the third straight session.
The downward trend started mildly on Sunday and gathered pace Monday. The main index of TSE, TEDPIX, which lost 8,000 points on Monday, shed another 7,000 points Tuesday to push the benchmark down to 208,197 points.
According to the Donyaye Bourse website, lack of buying in the early hours of Tuesday led to another sharp fall in most prices. The selloff escalated after investors turned to selling to contain further losses.
Banking and auto stocks contributed most to the selloff pressure. Stocks on the basic metals, chemicals and refineries were traded on the minimum daily prices, according to Financial Tribune.
Most observers say the stock market is undergoing a corrective phase after it rallied seven sessions in a row last week. However, others attribute the fall partly to political and international developments.
Reports that Iran may reciprocate the US pullout from the nuclear deal, the Majlis decision to put on hold gasoline rationing and data about falling auto production are among key issues said to be influencing the bearish market.
On Monday, ISNA quoted unidentified informed sources as saying that Iran plans to announce a series of "phased" measures in response to the US pullout from the 2015 nuclear deal.
In a closed Majlis session on Monday, MPs did not back the government’s proposal to increase gasoline prices and also postponed the fuel rationing plan in its entirety. Instead, they agreed to gasoline sales via smart cards.
Moreover, data released by the Ministry of Industry showed 29% decline in auto production in month to April 21 compared to a month ago.
Stocks in world markets recovered from most of their losses amid hopes that China and the US could still strike a trade deal despite a recent re-escalation in tensions.
Stocks across the globe were caught in a whirlwind on Monday after President Donald Trump said in a Sunday tweet that current 10% tariffs on $200 billion worth Chinese goods were set to increase to 25% on Friday. He threatened to impose 25% of tariffs on an additional $325 billion of Chinese goods “shortly.”
The TSE's main index TEDPIX lost 7,623.47 points or 3.53% on Tuesday to end trading at 208,197.1.
About 4.4 billion shares valued at 11.75 trillion rials ($77.08million) changed hands at TSE for the day.
Trading at TSE and over-the-counter Iran Fara Bourse starts on Saturday and ends Wednesday.
Winners and Losers
Eghtesad Novin Bank of Iran (EN Bank) was the biggest winner as its shares went up 5.58% to 3,820 rials.
Shahroud Sugar Company incurred the biggest loss among all TSE-listed companies and went down 12.46% to 4,622 rials per share.
Persian Gulf Petrochemical Industries Co. contributed the most to the benchmark's fall, followed by Esfahan Oil Refining Company (EORC), Mobarakeh Steel Company, Pars Petrochemical Company
(P.P.C), and Bandar Abbas Oil Refining Company.
Eghtesad Novin Bank of Iran gave the biggest boost to the benchmark index, followed by Darou Pakhsh Pharmaceutical Company and Luleh Va Mashinsazi Iran (LMICO).
LMICO is the biggest producer of large diameter ductile iron pipes in the Middle East.
The Price Index lost 2,189.09 points or (3.53%) to close at 59,785.6.
The First Market Index was down 5,679.52 points or (3.50%) to post 156,745.5. Second Market Index decreased by 14,877.96 points or (3.60%) to reach 398,726.0.
The Industry Index went down by 6,806.10 points or (3.52%) to register 186,745.9. Free Float Index was down 8,440.73 points to hit 233,976.56.
TSE 30 went down 352.24 points to settle at 9,925.6 and the TSE 50 ended 325.89 points lower to finish at 8,696.0.
Iran Fara Bourse’s main index IFX lost 52.74 points or 2.01% to close Tuesday trade at 2,570.53.
About 1.72 billion shares and securities valued at 6.50 trillion rials ($42.67 million) were traded at the over-the-counter exchange for the day.