Tehran Stocks Reverse Course to End Lower

EghtesadOnline: While in positive territory in the early hours of trading, the main gauge of the Tehran Stock Exchange reversed course in mid-day trading, causing the TEDPIX to shed more than 1,000 points on Tuesday.

News ID: ۷۴۸۱۰۵

07 August 2019

It seems the market responded to negative signals from developments both at the domestic and international fronts, according to the Donyaye Bourse website.

The market partly reacted to fears spawned from unofficial reports that the government may eliminate allocation of subsidized currency for importing basic goods and pharmaceuticals.

Despite mounting pressure on the government to scrap the policy, the government insists on staying put over fears that removing subsidized forex may push up prices of essential goods and medicine and lead to frustration among the people, especially those at the lower end of the economic ladder, according to Financial Tribune.

The investors were mainly disheartened by the statements by deputy health minister, Iraj Harirchi,  on Tuesday, warning about the potential impact elimination of the policy could on the struggling insurance and pharmaceutical sectors.

Most of the domestic pharmaceutical companies import raw material using subsidized currency. Each subsidized USD is worth 42,000 rials.

Following the rumors, stocks in food and pharmaceutical companies came under sell-off pressure.

Apart from the shares of small companies, there was a partial sell-off in some commodity stocks influenced by sharp falls in global markets on Monday.

Global markets were responding to another escalation in the US-China trade war. China allowed its currency to weaken against the greenback, prompting the US government to label China a currency manipulator.

Market Performance

The TSE's main index TEDPIX lost 1,186.04 points or 0.46% on Tuesday to end trading at 255,512.2.

About 3.32 billion shares valued at 13.51 trillion rials ($113.58 million) changed hands at TSE for the day.

Trading at TSE and over-the-counter Iran Fara Bourse starts on Saturday and ends Wednesday.

Khash Cement Company was the biggest winner as its shares went up 9.73% to 8,414 rials.

Iran Construction Investment Company incurred the biggest loss among all TSE-listed companies and went down 4.51% to 18,553 rials per share.

Persian Gulf Petrochemical Industries Company contributed the most to the benchmark's fall, followed by Mobarakeh Steel Company, Golgohar Mining and Industrial Company, Esfahan Oil Refining Company, Parsian Oil and Gas Development Group Company, and National Iranian Copper Industries Company.

Mapna Group gave the biggest boost to the benchmark index, followed by Telecommunication Company of Iran, Parsian Bank, and Iranian Investment Petrochemical Group Company.

The Price Index lost 320 points, or 0.46% to close at 69,051.0.

The First Market Index was down 785.87 points, or 0.42% to post 186,428.1. Second Market Index increased by 2,747.96 points, or 0.53% to reach 516,377.0.

The Industry Index went down by 1,202.65 points or 0.52% to register 229,428.4. Free Float Index was down 1,337.50 points to hit 289,106.92.

TSE 30 went down 108.20 points to settle at 11,221.0 and the TSE 50 ended 68.30 points lower to finish at 10,25.9.

Iran Fara Bourse main index IFX gained 11.9 points or 0.35% to close Tuesday trade at 3,421.86.