What is the stock market reaction to the new sanctions?

According to Tejarat News, the US Treasury Department announced the imposition of new sanctions against Iran, which have a negative impact on the stock market and the country’s economy. Accordingly, two individuals and nine legal entities related to Iran have been sanctioned.

In the list of these sanctioned companies, the names of two petrochemical companies active in the stock exchange can be seen. Khark Petrochemical and Maroon Petrochemical are two companies that were sanctioned by the United States on Thursday.

On the other hand, two citizens of India and China have been sanctioned due to their connection with the Iranian oil company “Triliance Petrochemical”, which is already under US sanctions. Fanavaran Petrochemical and four oil companies from the UAE and two companies from Hong Kong are on the sanctions list.

A review of the experience of Iran and other countries shows that the lifting or implementation of a new embargo takes at least one to two years, and it can not be said that the country’s economy will decline immediately after the announcement of a new embargo. Often, after the announcement of new sanctions, the country’s economy and financial markets change course due to the existing psychological climate, and after a while, they return to their normal orbit.

Increasing sanctions could also dampen hopes for fruitful nuclear talks, which would mean higher inflation. We have to wait and see if Iran will reach an agreement in the coming months or not!

Will the stock market be negative?

Fardin Aghabzargi, a capital market expert, told Tejarat News: “Sanctions on petrochemicals can have two negative effects on the market.” In the first place, the old routine of the Vienna agreement is broken, and this is the second series of sanctions in the last two months, and it signals an uneasy front to resolve the nuclear and nuclear issues.

“New sanctions on these three companies and the petrochemical industry could be a threat,” he said. But the psychological impact of sanctions will have a greater impact on the capital market. Of course, it should not be forgotten that sanctions take one to two years to take effect.

“The new US sanctions can be considered a political show in the capital market and certainly have a negative effect on the stock market,” he said.