Tehran Stock Rally on Hold

EghtesadOnline: The Tehran bourse opened Monday amid sell-off pressure in early hours of trading as investors rushed to sell to save gains from previous rallies.

News ID: ۷۴۹۹۷۶

05 May 2020

However, the downturn was relatively short-lived, particularly for large-cap stocks, as the market bounced back after outgoing money was replaced with new liquidity.

The market cap-weighted index soared 22,904 points to climb 2.4% on Monday to finish trade at 979,105 points, about 2% shy of the critical and psychological level of 1,000,000 points.

Many of the small-cap shares, however, were too feeble to recover the sell-off pressure and their ticker symbols were closed in negative territory as shown by 0.6% growth the equal-weighted index, which gives the same pace to all stocks irrespective of the their market capitalization.

Benchmark growth was driven mainly by large cap companies in petrochemical, refinery, metal and bank stocks. The giant Persian Gulf Petrochemical Industries Company alone accounted for more than 27% of the daily benchmark growth on Monday.

Value of trade stood of record high 143.4 trillion rials ($913 million) with about 10.02 billion shares  sold for the day, according to Bourse Press.

Given the slew of previous market rallies, observers linked the comparably slow pace of growth in market indicators and price corrections to investors’ wiliness to save past gains.

There is also a general psychological concern among  investors about a probable correction phase in the market as the TSE benchmark draws to the ‘hyper-level’.

However, it appears that the power of fresh liquidity entering the market by the flood of new investors diminishes fears and renders any correction in share prices short-lived.

According to Hassan Qalibaf-Asl, the newly-appointed managing director of Securities and Exchange Organization, 15 trillion rials ($94 million) in new money is injected into the bourse every day.

The biggest winner in Monday’s trade was Esfahan Oil Refining Company as its shares went up 10.13% to 9,369 rials per share.

AzarAb Industries Company incurred the biggest loss among all TSE-listed companies and went down 5% to 35,813 rials per share.

MAPNA Group contributed the most to the benchmark's fall, followed by theh Informatics Services Corporation, National Development Investment Group Company and Nouri Petrochemical Company.

Persian Gulf Petrochemical Industries Company gave the biggest boost to the benchmark index, followed by Mobarakeh Steel Company, National Iranian Copper Industries Company and Esfahan Oil Refining Company.

The benchmark of junior equity market Iran Fara Bourse, IFX, gained 141.92 points, or 1.28%, to close Monday trade at 11,226.56.

About 3.45 billion securities valued at 66.29 trillion rials ($422.3 million) were traded at the over-the-counter exchange for the day.

Shahid Tondgooyan Petrochemical Company had the highest number of traded shares and trade value as 246.7 million of its shares worth 3.66 trillion rials ($23.34 million) were traded.

Damavand Power Generation Company, Iran Office Machines Industries Company, Ghadir Petrochemical Company and Khazar Sea Shipping Lines Company had the most negative impact on IFX.

Middle East Mines and Mineral Industries Development Holding Company gave the biggest boost to IFX, followed by Saba Tamin Investment Company, Shahid Tondgooyan Petrochemical Company and Arfa Iron and Steel Company.