Blame the stock market stagnation on the dollar/ why the stock market does not move? – Tejarat News
According to Tejarat News, in a situation where the dollar goes through a specific movement, experience has shown that the stock market shows this movement in its indicators with a slight delay. During the past few weeks, Ferdowsi square transactions have had very limited fluctuations. The stock market is also caught in a recession of the same nature. In this situation, is the stagnation of the Tehran Stock Exchange rooted in the stagnation of currency transactions?
How does the dollar affect the market?
Capital market expert Amir Ali Amir Baqeri said in an interview with Tejarat News: “The dollar can affect the stock market in two ways; The dollar affects the stock market firstly from the asset-oriented aspect. Because when the price of the dollar increases, this itself is rooted in inflation. Inflation also has a direct effect on assets.
He added: “Now, if we consider the return on assets constant over time (the same ROI), the American bill will play a major role in the impact of profits and losses on companies in terms of riyals.”
This capital market expert stated: “An important point that should be taken into account is the dollar rate, which affects the capital market. In fact, the rate at which the capital market reaches equilibrium in the medium and long term is the real exchange rate. Based on this, the exchange rate that wants to be suppressed or ordered to move away from its equilibrium point, either positively or negatively, is naturally not a calculation criterion. Therefore, the dollar will converge with the real dollar rate in the medium and long term.”
Amir Bagheri stated: “For this reason, the market expects, at least in the medium and long term, the recession that is currently in the stock market, to disappear, and to see a medium and long-term upward trend in valuable and dollar-oriented stocks, and then the market as a whole. Capital is a witness.”
The effect of market sentiment on trading trends
Referring to the presence of various factors affecting the stock market, Amir Bagheri said: “The reason that we are currently in a weak phase of the capital market is not only American bills. Here the discussion of market sentiment is raised; The psychological component of transactions.
This capital market expert explained: “Since at the moment, a heavy inflation outlook is not imagined for the asset markets, at least in the short term, naturally, the recession also dominates the body of the capital market.”
He added: “But if a person has an analytical view of the capital market environment and macroeconomic factors and examines companies from an asset-oriented and profit-oriented perspective, it can be claimed that in the medium term, reasonable returns can be obtained from the capital market compared to parallel markets. “
Amir Bagheri stated: “At the same time, as experience has proven, the capital market is also facing a leader-oriented approach. In this situation, some rules and regulations on some industries make the whole market unconscious. “Currently, the sentiment that happened in the market was against the promises that were made about the capital market.”
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