Tehran Stock Market Plunges: The Aftermath of a 12-Day Israel Conflict
Tehran’s stock market has reopened with a dramatic decline following a 12-day escalation of conflict between Iran and Israel, igniting fears among investors and unleashing a massive sell-off.
The Market’s Dismal Return
The trading floor witnessed a disheartening collapse, with over 99% of listed companies experiencing a decline in value. The fallout resulted in an astonishing 350 trillion-rial (approximately $416.7 million) sell-off queue. By the end of the day on Saturday, total sell orders reached this staggering figure, leading to the main index plummeting by 62,503 points, or 2.1%, to settle at 2,922,101. The equal-weight index followed suit, dropping 15,522 points, finishing at 908,163.
Political Turmoil and Investor Sentiment
The sensitivity of the market to political and security fluctuations has heightened investor distrust during this tumultuous period. Past crises, including the missile strikes on Israel and the passing of former president Ebrahim Raisi, have showcased the market’s volatility. In a bid to mitigate losses, the Securities and Exchange Organization previously imposed stricter daily trading limits, typically capped at 5%.
Economic journalist Arash Hassannia remarked, “It was anticipated that the market would start negatively after nine days of closure. Officials attempted to control the fallout from Israel’s attack but ultimately failed.”
Opening Day Chaos
On the day of reopening, the market was already signaling distress. In a mere 90 minutes, over 99% of stocks plunged, marking a grim start as the main index slipped about 1% to 2,957,000 points. The equal-weight index fell nearly 3,800 points, edging close to 920,000.
Investors were quick to react, with trade volume exceeding 20 trillion rials ($23.8 million) in just the initial hour and a half. Individual investors withdrew an alarming 12 trillion rials ($14.3 million). Banks and investment firms dominated trading values, with 6.6 trillion rials ($7.85 million) and 2.8 trillion rials ($3.33 million), respectively.
The Broader Economic Implications
Economic outlets have described the market status as “a full-scale crisis.” Reports suggest that the cessation of military conflict has done little to soothe apprehensions among investors, who are now more worried than ever about the prospect of renewed fighting. Analysts perceive this decline as potentially indicative of a longer-term crisis.
Signs reflecting this turmoil include massive sell queues, a lack of buyers, extensive liquidity outflows, and widespread losses—elements that analysts label as the beginning of a psychological and structural crisis.
As uncertainty hangs heavy over the Tehran stock market, investors are left grappling with the repercussions of geopolitical instability. The market’s performance remains a pivotal indicator of economic health, and stakeholders are keenly watching the developments closely.
For further insights into the evolving situation in Iran and its impact on regional markets, check authoritative resources like Iran International for up-to-date information.
