The Effect of Trade Sanctions on Stock Indexes in Different Industries Listed in the Stock Exchange

Sanctions are one of the systematic risks of the capital market that cannot be reduced by creating a portfolio, so the trader can be aware of the effects of sanctions on the company's total return and can make the best decision on stocks in the face of similar events. This study aims to investigate the impact of trade sanctions, export and import sanctions on the stock index of industries listed on the stock exchange. The statistical population of the study is all selected industries in the Tehran Stock Exchange. The volume of the sample includes seven industries with 94 companies from 2015 to 2019. The results show that in terms of the severity of the impact, export sanctions have the opposite effect on the automotive, stock, food, and sugar stocks. Also, import sanctions have a significant effect on the stock index of the automotive, pharmaceutical, and food industries, except for sugar and basic metals. Stock market investors use stock market indicators to get a good picture of the market trend and the ability to evaluate the past and, in some cases, predict the future. Import sanction has a negative and meaningful effect on the stock index of Automotive, pharmaceutical, and Food, with an exception on sugar, and metal industries.