TSE's main index, TEDPIX, rose 1,543.40 points to 182,211.7 — snapping a two-day losing streak. Bank and auto shares led the rally as two stocks have become a new darling for investors. The two stocks gained attention after the fad for export-oriented companies' shares faded in the face of newly reimposed US sanctions.
Export-oriented stocks such as petrochemicals and minerals had led the index to record highs in late summer and early fall after the rial's slide boosted the earnings of these companies. Besides the threat of sanctions, the bear market for commodities such as oil has made these shares less attractive for investors.
Bank shares, however, have found a bright prospect as it is expected that lenders will benefit from a recapitalization from currency revaluations which is on the cards and the fact that some lenders are exempt from US secondary sanctions, Financial Tribune reported.
Last Monday, the United States re-sanctioned Iran’s oil, banking and transport sectors and threatened more hostile action to force Tehran to return to the negotiating table. The Islamic Republic has dismissed the move as the work of international outlaws and vowed to defy the wholesale belligerence from Washington.
In August, the US reimposed a first round of sanctions after President Donald Trump pulled out of the 2015 nuclear deal between world powers and Tehran under which the sanctions were eased.
The Securities and Exchange Organization News Agency reported that institutional investors' support was a big factor behind the rise in bank and auto shares.
Auto shares were also in high demand on Monday since further price hikes for cars are on the horizon. This is while barring a meaningful price hike, automakers are now faced with huge losses and therefore the demand for their shares is not backed by fundamental factors.
Global trends indicative of a down market for commodities are affecting TSE investors with liquidity moving toward stocks with less global exposure such as bank, auto, and construction sector according to Donyaye Bourse, an analytical website.
Asian shares fell on Monday, extending weakness in global equity markets at the end of last week as soft Chinese economic data and falling oil prices rekindled anxiety about the outlook for world growth.
A spike in US bond yields, driven by the US Federal Reserve's commitment to keep raising borrowing costs, has also shaken emerging markets as investors poured money into US dollar assets.
Taking some pressure off a sharp drop in oil prices last week, Saudi Arabia's energy minister said Sunday that the kingdom plans to cut crude oil supply to world markets by 500,000 barrels per day in December, representing a global reduction of about 0.5%.
Market Indices
Tehran Stock Exchange’s main index gained 1,543.40 points or 0.85% on Monday to end trading at 182,211.7.
About 2.46 billion shares valued at $54.65 million changed hands at TSE for the day. Trading at TSE and Iran Fara Bourse starts on Saturday and ends Wednesday.
Butane Industrial Group was the biggest winner as its shares went up 9.19% to 8,819 rials per share. Loghman Pharma Co. incurred the biggest loss among all TSE-listed companies and went down 4.36% to 2,612 rials per share.
Tamin Petroleum and Petrochemical Investment Company gave the biggest boost to the benchmark index, followed by Mobarakeh Steel Co., and Iran National Copper Industry Company.
Fajr Petrochemical Company contributed the most to the benchmark's fall, followed by Jam Petrochemical Co., and Behran Oil Co.
The Price Index gained 449.59 points to close at 53,066.6. First Market Index was up 1,223.45 points to post 135,546.5.
The Second Market Index increased by 2,659.82 points to reach 356,634.8. Industry Index went up by 1,358.89 points to register 165,636.9.
The Free Float Index was up 1,814.49 points to hit 192,312.56. TSE 30 went up 83.12 points to settle at 9,021.3 and the TSE 50 ended 68.11 points higher to finish at 8,041.4.
IFX Up 1.29%
Iran Fara Bourse’s main index IFX gained 25.34 points or 1.29% to close Monday trade at 1,986.18.
About 664.06 million securities valued at $27.2 million were traded at the over-the-counter exchange for the day.
Iran Cultural Heritage and Tourism Investment Group Company had the highest number of traded shares and trade value as 36.42 million of shares worth $1.35 million changed hands.
Ghaed Bassir Petrochemical Products Co., Tadbirgaran-e Fars and Khuzestan, and Shirvan Sugar Company registered the highest value increase.
Afranet, Yazd Alloy Steel industries Co., and Mihan Insurance suffered the biggest decline.
Esfahan Steel Co, Marun Petrochemical Co., and Hormozgan Steel Co. had the most positive impact on IFX.