The Effect of Nuclear Talks on Industries Operating in Stock Market in Iran

Various studies show that political events affect stock exchanges in different ways. One of the most important political events for I. R. Iran was nuclear talks with G5, running to solve limitations and sanctions imposed on Iran. Given the effects of sanctions on Iranian macro-economics, especially exchange rate and trade balance, Nuclear Talks affected on Tehran stock exchange. Drawing “daily return” approach, this study aims to capture the reaction of invertors working in stock market and to examine changes in stock price and indices as sign of their attitude toward nuclear talks. In doing so, having employed a panel data of 28 cross-section during 1422 days, abnormal return of industries is used for clustering them through a cluster analysis. Findings show that, given abnormal return of each industry, we shall have three groups including high positive reaction, low positive reaction, and negative reaction. These groups consist of 2, 22 and 4 members, respectively. In this context, discriminant analysis is used to evaluate the distinction level and creditability of clustering.