Iran's foreign exchange market and stock exchange posted strong gains following the signing of the Islamabad Memorandum between Iran and the United States, as investors responded positively to expectations of easing tensions and improved economic prospects.

The Iranian toman appreciated sharply against the U.S. dollar over the past week, strengthening from around 180,000 tomans per dollar to nearly 152,000, according to figures cited by international media reports. Analysts said the recovery reflected renewed market confidence after the agreement, which includes provisions aimed at ending hostilities, reopening the Strait of Hormuz to commercial shipping and lifting maritime restrictions.

Economists said the successful implementation of the memorandum could encourage foreign investment, improve access to international markets and help ease inflationary pressures. The possible release of frozen Iranian assets and the restoration of oil export channels are widely viewed as key factors that could influence the country's economic outlook in the coming months.

Merchants and consumers in Tehran expressed hope that the strengthening of the national currency would eventually translate into lower prices for food, fuel and other essential goods.

Tehran Stock Exchange extends gains

The Tehran Stock Exchange (TEDPIX), which had remained closed for nearly 80 days amid the conflict involving the United States and the Israel regime, resumed trading and recorded significant gains as investor sentiment improved.

According to Iranian media reports, the benchmark TEDPIX index approached the five-million-point threshold, with trading activity surging following the market's reopening. Iranian media outlets also reported that energy, petrochemical and industrial shares led the rally amid expectations of stronger exports and improving economic conditions.

Reports carried by Iranian media indicated that nearly 90 percent of the country's petrochemical facilities had resumed production, while investors shifted funds from gold and foreign currencies back into equities and exchange-traded investment funds as confidence returned to financial markets.

Iranian media further reported that expectations surrounding a proposed $300 billion reconstruction and economic recovery initiative, together with prospects for sanctions relief and the gradual reintegration of Iranian businesses into the global financial system, contributed to the positive market mood.

Financial analysts cautioned that the sustainability of the rally will depend on the full implementation of the memorandum and the outcome of negotiations expected to continue during the 60-day diplomatic process outlined in the agreement.(ILKHA)