The benchmark shed 23,679.64 to end trade at 1,320,761, logging the second biggest daily decline in three weeks.
Trade saw large-scale disruptions on platforms operated by brokerages in the middle of the session that resulted in a sharp plunge in trading activities.
Retail trade declined 27% compared to the previous session to reach 22.34 trillion rials ($77 million), the lowest in seven months. Retail investors contributed to 46% of the total deals.
Capital outflow by retail traders rose 50% compared with the previous session to reach 5.23 trillion rials ($18 million).
About 4.63 billion shares valued at 25.61 trillion rials ($91.5m) changed hands at TSE for the day.
Trading at TSE and junior equity exchange Iran Fara Bourse starts on Saturday and ends Wednesday.
Azarbayjan Investment Development Company was the biggest winner as its shares went up 4.94% to 38,270 rials per share.
Iran Mercantile Exchange incurred the biggest loss among all TSE-listed companies and went down 4.98% to 27,870 rials per share.
National Iranian Copper Industries Company contributed the most to the benchmark's fall, followed by Persian Gulf Petrochemical Industries Company, Mobarakeh Steel Company and Social Security Investment Company.
Kourosh Food Industry Company gave the biggest boost to the benchmark index followed by Beh Pardakht Mellat, Middle East Bank and Saman Kish Electronic Payment Company.
IFX Down 1%
Iran Fara Bourse main index IFX lost 190.11 points or 0.99% to close Sunday trade at 18,930.72.
About 1.75 billion securities valued at 28.4 trillion rials ($101.4m) were traded at junior exchange for the day.
Kerman Province Development Investment Company had the highest number of traded shares as 100.71 million of its shares worth 90.08 billion rials ($321,740) were traded.
Arya Sasol Polymer Company, Marun Petrochemical Company, Iran Fara Bourse and Zagros Petrochemical Company had the most negative impact on IFX.
Ghadir Capital and Industry Development Company gave the biggest boost to IFX, followed by MAPNA Asaluyeh Power Generation Company, Afranet Company and Day Insurance Company.