Stocks in Iran rallied as trading resumed following a preliminary deal on the country’s nuclear program that may lead to the lifting of sanctions that are weighing on the economy.
The Tehran Stock Exchange’s main index climbed 3.2 percent on Saturday to 67,827 by the close of trading in the city, according to its website. Iran and six countries, including the U.S., agreed on a framework deal on April 2 over its nuclear program, with details to be worked out in a final accord in three months.
“There’s a positive outlook after the nuclear understanding,” Masoud Gholampour, an analyst and audit specialist at Novin Investment Bank in Tehran, said by phone. “It’s very likely to have a really positive impact on companies’ earnings-per-share. All stocks are being influenced right now by the psychological impact of the news, and the expectation that sanctions will be lifted.”
Crowds gathered on Iran’s streets to celebrate after the deal was announced following marathon talks this week, even as U.S. State Department spokeswoman Marie Harf said Friday the country wouldn’t get any relief from economic sanctions until months after the deadline for sealing a final agreement.
Khalij Fars Petrochemical Co. rose 4 percent and Iran Telecommunications Co., which operates a mobile-phone network, climbed the same amount.
Iran’s oil exports may rise by 1 million barrels a day if sanctions are lifted, Gholampour said.
“This could add about $24 billion to $30 billion additional revenues for the country, significantly increasing currency flows, working capital and liquidity,” he said. “It will have a domino effect throughout the economy.”
In downtown Tehran, foreign-exchange traders on the unregulated market, where ordinary Iranians purchase U.S. currency at more expensive rates than those of the central bank, said the rial had weakened as the preliminary deal didn’t ease dollar demand. By Saturday afternoon, the rial depreciated 2.2 percent to 32,500 per dollar from morning rates, according to five traders, including Khosrow Abdi.
“People’s eyes and ears may be on what’s being said, but when it comes to what is actually going to happen, I have my eyes on three months’ time,” he said. “Whenever there’s an American flag hanging on the old embassy, that’s when you know it’s a deal and not an understanding.”
The U.S. Embassy in Tehran has been closed since 1979, when it was seized during the Iranian revolution.