What factors contribute to the upward trend of the stock market?

According to Tejaratnews, if the value and volume of transactions do not improve and the outflow of real money continues, it is predicted that a positive outlook is not expected in the investment market in the coming week. Exchange rate growth and inflation expectations may be the market drivers in the medium term.

According to Economy News, The total stock index had a downward trend last week. It fell sharply in the first two days of the week and then continued to rise. The index fell more than 30,000 units in the first two days and rose a total of 9,000 units in the next three bullish days.

Continuous withdrawal of capital from the stock market

Last week, the stock market returned negative for the second week in a row and the outflow of real capital continued. This week, real capital outflow was recorded in four days and a total of 1,611 billion tomans of real capital was withdrawn.

In addition, the value of retail transactions decreased on all days of the week and the market experienced a recession.

In the mentioned week, the average value of stock exchange transactions was 4,875 billion Tomans, which has decreased by 18% compared to the figure of 5,952 billion of the previous week.

Although the outflow of liquidity continued last week, the outflow of real money decreased by 28% compared to the previous week.

On all trading days of the week, trades were closed with excess demand. The surplus value of demand at the end of Sunday trading was 334 billion tomans, which was the highest figure of the week. After two or three consecutive days, it declined.

Last Wednesday, the market closed with a demand surplus of 48 billion tomans, which is the lowest amount this year.

So the overall market situation was balanced but the downward forces were stronger. Low trading volume and declining transaction value along with declining demand and real money outflows are the main downward trends in the market.

2 driving force for the stock market

Some analysts believe that the low trading volume is due to the multi-day holiday. Traders have a short-term view and liquidity is important to the market. So in the days leading up to the end of last week, the demand side got smaller and smaller, and the tendency to liquidate assets increased.

Especially since prices were rising in the asset markets and were more attractive to some traders. However, two factors appear to drive market growth in the medium term: ‌ Exchange rate growth and inflation expectations can drive the market in the medium term.

On the other hand, some technical analysts believe that if the index rises for four consecutive days, it can be considered as the formation of an uptrend in the market. Therefore, today’s trading can be the fourth piece of the ascending puzzle of Tehran Stock Exchange.

But if the value of transactions and trading volume does not improve and the process of real money outflow continues. A positive outlook awaits the market next week.