The effects of bank interest rates on the stock market / market in recession

According to Tejarat News, the total stock index fell by about 10,000 units today and many of the index symbols had negative performance. Real people withdrew 470 billion tomans from the stock market today, with the largest outflow of real money from the stock exchange or over-the-counter related to the base metals group and also the shares of Pars Steel Sabzevar Company.

Capital market experts believe that one of the reasons for this volume is the outflow of liquidity and the decline in the exchange rate index and signals coming to the market from the central bank. The exchange rate has lost 28,000 tomans after the appointment of the new head of the Central Bank.

Bank interest rates must be specified

In an interview with Tejarat News, Mohammad Mehdi Oshrieh, a stock market expert, pointed to the market and shareholders’ expectations of a possible reduction in bank interest rates and explained: “One of the most important factors influencing the capital market is determining the bank interest rate.” After the appointment of Mr. Salehabadi as the head of the Central Bank, there are many rumors about bank interest rates; Some are reporting lower interest rates and others are reporting possible interest rate hikes.

Ashrieh further explained: the uncertainty of the market and shareholders regarding the interest rate and the uncertainty of the percentage and its general conditions cause uncertainty and safe operation in the stock market, and this issue damages the market. Determining bank interest rates is very important for the market and shareholders.

The world of economics wrote:

Witness the graph of doubt in the stock market

Falling prices continue in the stock market. Yesterday, the stock index fell more than 10,000 units to show the reversal of prices in the weighted average of this market with the indicator reaching the range of 1.455 million units, but what was more worrying than the fall in stock prices, decreased The value of small stocks was the lowest in the last 40 months, indicating a downturn in the market. In a more general context of the analysis of the developments in the stock market, it seems that the market is still reacting to the product of the sharp inflation recorded from 1997 to 1999 in the continuation of the index decline movement, which is corrected in the language of chartists; Inflation, due to the existence of trading restrictions such as volatility and base volume, led the index to rise from 90,000 units to 2 million and 100,000 units and led to sharp fluctuations in stock market prices. It seems that the stock market will fluctuate until the next wave and the possibility of a hurricane, and all its up or down fluctuations will be limited as long as the conditions are stable, which is a sign of shareholders’ skepticism about the current situation.

Market in recession?

But beyond examining the numbers recorded in the stock market, the value of small stock transactions in this market indicates that the current interest of investors active in this market to direct investment has decreased. Accordingly, the end of trading on Sunday coincided with the decline in the value of retail transactions to a limited 3218 billion tomans, which is a decrease of 450 billion tomans compared to the previous day. Of course, this is not the first time that the value of retail transactions has been declining and the stock market is showing signs of relative sluggishness in this figure in particular. A closer look at the trend of the mentioned developments indicates that from the first days of the current year, when the value of small transactions had dropped to about 1230 billion Tomans (April 6), during a continuous trend until September 28, we saw an upward trend in value. We have been in small transactions. To the extent that the value of real shareholders’ transactions reached the range of 11 thousand and 531 billion tomans with a significant jump on September 28, and remained open to higher levels from that day onwards.

This led to a steady decline in the value of stock exchange transactions after this day in a continuous and not so erosive way; The path that has continued until today and as mentioned, the value of this type of trading on the stock exchange has reached about 3218 billion tomans yesterday, which was the lowest figure since June 20 of this year.

The important point, however, is that if we examine the line chart of the value of retail transactions in the form of a technical chart, what happened from the beginning of this year to the seventh of September can be analyzed as an uptrend, based on a positive trend in It has been moving. As it was said, this trend has now been broken and the increase in the value of transactions on the 31st of September and the 10th and 11th of October, beyond 5 thousand billion Tomans, has only had the role of pullback for this newly formed downward trend.

This is precisely why net real purchases have not been able to record positive and appropriate records in recent days, and we have seen a steady outflow of money from small investors in the direct trading cycle of the stock market.

Examination of the figures recorded in this important measure also indicates that the market in recent days has sunk into a defensive lock rather than showing the progress of prices to higher levels, and seems to be preparing for different conditions.