Controlled reopening ends Iran's lengthy stock market shutdown

Tehran, Iran – The closure of Iran's stock market, which lasted nearly three months, has officially concluded with a controlled reopening characterized by certain limitations for investors.

During the trading sessions on Tuesday and Wednesday at the Tehran Stock Exchange, investors were able to tap into some liquidity, although underlying economic issues remained apparent.

Reports indicate that over a third of the market's primary players were not participating, a precautionary measure aimed at shielding shareholders from the ongoing impacts of the United States-Israel conflict.

According to Hamid Yari, deputy supervisor of the Securities and Exchange Organization, 42 ticker symbols representing approximately 36 percent of the market were unavailable for trading. As a response, trading hours were extended by one hour on each of the two days to accommodate the reopening.

While Yari expressed hope that lengthy market closures could come to an end, he cautioned that renewed attacks could prompt authorities to take further action.

The reopening saw no participation from major firms such as the Fajr and Mobin petrochemical companies, the Khuzestan and Mobarakeh steel groups, as well as utility providers and investment firms heavily vested in infrastructure vulnerable to US and Israeli strikes.

Additionally, equity funds with over 35 percent of their investments allocated to the most impacted companies will remain inactive until further notice, with the objective of "preventing additional selling pressure and supporting the market."

Structural measures implemented prior to the conflict intended to stabilize the market limit fluctuations in shares for the remaining active players to a range of 3 percent up or down.

The Iranian stock market is relatively undeveloped, significantly hampered by US sanctions and isolation from global financial markets. While it constitutes a smaller portion of financial activities when compared to banks and the state, it serves as a crucial indicator of investor sentiment and short-term liquidity conditions.

Market opens to marginal improvements

Overall, initial signs during the two-day reopening were encouraging. Buy orders surpassed sell orders, and the equal-weight index, which allocates equivalent weight to each listed company for improved assessment of stock movements, experienced a slight uptick.

The TEDPIX, the principal index of the Tehran Stock Exchange, noted modest increases on Tuesday and further gained 44,000 points on Wednesday, bringing it to over 3,758,000 as the weekend approached.

The index reached a record high at the beginning of 2026, peaking at nearly 4,500,000. However, its trajectory has been downward since nationwide protests commenced in late December, compounded by deteriorating economic conditions and the onset of war leading to market closure.

Economist Mehdi Haghbaali conveyed to Al Jazeera that the authorities faced significant challenges when considering the reopening, particularly regarding security constraints that limit companies from fully disclosing the extent of damage inflicted upon their facilities and production sites.

"Brokerage firms, especially smaller ones, are experiencing notable difficulties," Haghbaali remarked. "Numerous traders were engaged in leveraged positions through credit lines, particularly options traders whose contracts lapsed during the market closure, leaving them without viable options."

To mitigate further distress, authorities temporarily prohibited brokers from compelling investors to contribute additional cash and collateral or sell shares that fall below specified position thresholds.

Does this mean actual growth?

Haghbaali noted that the two-day reopening exceeded expectations; however, the positive results may be more indicative of the already dire economic conditions rather than genuine market recovery.

Significant inflation has beset Iran in recent months, diminishing the real price of shares. Furthermore, the steep depreciation of the Iranian rial against the US dollar has made export-focused companies more appealing, as their revenues often convert to higher domestic currency earnings.

Nonetheless, caution is warranted, as investors may require discounts to consider riskier shares for investment.

"Trade has been severely disrupted, exporters will struggle to sustain operations, and escalating inflation will further impede the generation of real value, which will ultimately be reflected in stock valuations," the economist explained.

As of late April, the inflation rate stood above 70 percent according to the latest official statistics, and the situation has only deteriorated further due to the US imposing a naval blockade of Iran's southern ports.

In light of a significant budget deficit, the government's capacity for intervention is constrained, offering only minimal assistance to families affected by sanctions, limited to basic subsidies and e-coupons for essential goods, while also intensifying efforts to curtail hoarding and price manipulation.

Historically, during previous economic difficulties, Iran has sought to manage foreign currency scarcity—which often fuels inflation—by restricting the importation of select consumer goods.

To tackle the current inflation surge, authorities might need to reinstate such measures, according to Haghbaali, despite the necessity for importing materials essential for reconstructing war-damaged infrastructure. Regardless, the government faces no simple choices ahead.

"A peace agreement between the US and Iran could fundamentally alter the outlook, enhance market expectations, and provide much-needed relief," he added.