Tehran Stock Market Opens Sharply Lower After 12-Day Conflict With Israel

Following a 12-day conflict between Iran and Israel, Tehran’s stock market faced a tumultuous reopening with a significant drop in value that left investors in a state of panic. The market saw more than 99 percent of listed companies plummeting in worth, causing an unprecedented sell-off totaling 350 trillion rials (approximately $416.7 million).

By the close of trading on Saturday, the total sell orders had reached 350 trillion rials. The main index experienced a decline of 62,503 points, equivalent to 2.1 percent, finishing the day at 2,922,101. Similarly, the equal-weight index saw a decrease of 15,522 points, concluding at 908,163.

Investor anxiety was fueled by the market’s sensitivity to political and security circumstances, exacerbating unease and distrust among investors. Tehran’s stock market had previously suffered losses due to Iran’s precarious foreign engagements. In response to previous crises, such as missile strikes on Israel and the passing of former President Ebrahim Raisi, the Securities and Exchange Organization had imposed daily trading limits to mitigate losses. Typically, Iran enforces a daily price fluctuation limit of five percent.

Economic journalist Arash Hassannia noted, “It was expected the market would start negatively after nine days of closure. Officials tried to control the fallout from Israel’s attack but failed.”

Reopening amidst fraught signals, the stock market witnessed over 99 percent of stocks trading in the red within the first 90 minutes. The main index registered a decline of about one percent to 2,957,000 points, while the equal-weight index fell nearly 3,800 points, reaching around 920,000.

The initial 90 minutes of trading saw a trade volume exceeding 20 trillion rials ($23.8 million), with individual investors withdrawing nearly 12 trillion rials ($14.3 million). Banks and investment firms led trading values with 6.6 trillion rials ($7.85 million) and 2.8 trillion rials ($3.33 million), respectively.

Market observers characterized the market situation as “a full-scale crisis,” warning that the military conflict’s termination did not assuage the market’s uncertainties; instead, apprehensions intensified as investors feared further conflict. Analysts interpreted the steep decline as a potential harbinger of a prolonged crisis.

Massive sell queues, a scarcity of buyers, extensive liquidity outflows, and widespread losses were regarded as indications of “the start of a psychological and structural crisis” by analysts.