Iran’s stock market experienced one of its worst periods after the 12-day war between the Iranian regime and Israel. The Tehran Stock Exchange (TSE) entered a turbulent phase following the intense conflict. The war brought direct military confrontation and heightened geopolitical risks, triggering negative effects on Iran’s capital markets.
As the war erupted, the TSE was promptly shut down. This closure was enacted under Article 23 of the Securities Market Law, allowing for the suspension of trading in emergency situations. The aim was to shield investors from extreme volatility and prevent a mass exodus of capital.
During this period, only fixed-income funds were partially reopened, allowing investors to access liquidity for essential needs. Upon the declaration of a temporary ceasefire, the TSE reopened without significant financial support from the authorities. The result was a dramatic sell-off.
Over 99% of listed stocks traded on the first day, with the main TSE index plummeting by 62,503 points (2.1%). A record 35 trillion toman ($700 million+) sell queue formed, reflecting widespread investor panic. Trading volume in retail shares was low—just 2.63 trillion toman—signaling deep mistrust among market participants.
One of the most criticized aspects of the reopening was the absence of proactive support from the regime’s financial authorities. No reduction in price fluctuation limits was implemented. No significant liquidity injection was made by the government, central bank, or major institutional investors, despite expectations.
Regime economic officials, including the new Minister of Economy, insisted on reopening the market quickly but failed to coordinate effective support measures.
Stock market turmoil after war
The only notable intervention was the activation of the Market Stabilization Fund, which began limited purchases but was unable to stem the tide of panic selling.
The numbers from the first trading day after the war underscore the severity of the situation. Total trading value reached 13.57 trillion toman, but only 28% was in retail stock trades. Outflows from fixed-income funds exceeded 192 billion toman, as investors sought safety.
Over 2.4 trillion toman in real money left the market, further draining liquidity. The crisis has both psychological and structural dimensions. Investor confidence has been severely damaged by the war and the regime’s inability to manage the reopening effectively.
The market’s liquidity and depth have diminished, making it harder for investors to buy or sell shares without moving prices. Experts have outlined several urgent steps for the regime to restore stability:
– Activate and expand the Market Stabilization Fund to provide meaningful buying support. – Temporarily reduce price fluctuation limits to prevent extreme daily losses.
– Inject substantial liquidity through coordinated action by the central bank, government, and institutional investors. – Communicate transparently with investors about the steps being taken. – Consider extending trading suspensions for highly volatile stocks until conditions stabilize.
Without such measures, the risk is that the crisis will deepen, eroding trust in Iran’s capital markets and further damaging the broader economy. The failure to manage the fallout has shattered investor confidence and left the market in a state of prolonged distress. For millions of Iranians, it’s one more reminder that the system is incapable of reform and economic stewardship.
