A Pulsating Capital Market — But Why?

TEHRAN (Iran News) Active and influential symbols in the market can be described as follows: the recent flow of liquidity has been concentrated in certain industries and specific symbols.

Index-making symbols such as Foolad and Fmeli have had the most positive impact on the index in recent days. This group benefits from rising global metal prices and exports.

Similarly, index-making energy symbols such as Shapran, Shapna, and Shebandar have also been influential, as these stocks are consistently attractive due to their value and profitability and remain among the market’s most highly traded and liquid stocks.

Following metals and oil, the banking and investment sectors gained attention. Index-making symbols such as Vebmellat, Shasta, and Ghadir drew significant interest. Vebmellat has been one of the most heavily traded banking symbols in recent days. Large investment companies like Shasta and Ghadir are also key market players.

After the banks, the automotive sector stood out. Index-making stocks such as Khodro and Datsra also accounted for high trading volumes in recent days.

But in a “neither war nor peace” situation, why has the capital market gained such momentum, and why is capital flowing into this market from many other sectors?

Almost all political-economy experts summarize the main reasons for the market’s current appeal in the following factors:

High liquidity (marketability): In unstable conditions, investors look for markets where they can enter and exit quickly. Compared to real estate or automobiles, the stock market offers higher liquidity.

Inflation and depreciation of the national currency: In such conditions, people turn to the stock market or other assets to preserve the value of their capital and protect their purchasing power.

Inflation expectations and rising prices: If market participants anticipate higher prices for goods or raw materials, they tend to buy shares of manufacturing or export-oriented companies to hedge against inflation.

Government policies to manage the crisis: Governments may support the capital market through measures such as injecting liquidity or lowering interest rates, which can attract investors.

Profitability of certain companies in special conditions: Some industries (such as metals, petrochemicals, and raw materials) may become more profitable during sanctions or geopolitical tensions, increasing demand for their shares.

The stock market’s relative attractiveness compared to other markets: If parallel markets like currency, gold, or housing lose their appeal due to government controls or other factors, the stock market becomes a more attractive alternative.

However, it must be noted that this positive trend may be driven by excitement and could involve significant volatility and risk, as a “neither war nor peace” environment is inherently unpredictable and subject to sudden change.