In August, Turkey’s stock market experienced the steepest decline globally, with the benchmark Borsa Istanbul 100 Index plummeting by 8.3%. The sharp drop underscores the growing challenges faced by Turkish equities, which have been negatively impacted by tight monetary policies and weaker corporate profits.
The Borsa Istanbul 100 Index (BIST 100) closed at a new three-month low on Monday, reflecting ongoing market turbulence. The index fell by 1.06% on the day, driven lower by losses in key sectors, including basic metals, textiles, leather, and tourism.
Sector-Specific Declines
Among the notable decliners, the BIST Basic Metal Index, BIST Textile Leather Index, and BIST Tourism Index saw significant losses, contributing to the broader market downturn. At the close of trading in Istanbul, the biggest gainers on the BIST 100 included Baticim Bati Anadolu Cimento Sanayi AS (IS), which saw a notable increase of 7.56%, or 15.50 points, ending at 220.50. Cimsa Cimento Sanayi ve Ticaret AS (IS) gained 4.18%, or 1.40 points, to close at 34.90, while Kontrolmatik Teknoloji Enerji ve Mu (IS) rose by 3.81%, or 1.80 points, to reach 49.00.
In contrast, the biggest losers were Kayseri Seker Fabrikasi AS (IS), which fell by 9.33%, or 2.46 points, closing at 23.90. Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS Class D (IS) declined by 6.92%, or 1.70 points, ending at 22.86. Additionally, Koza Altin Isletmeleri AS (IS) saw a drop of 6.72%, or 1.90 points, to close at 26.36.
Overall, the number of falling stocks significantly outweighed advancing ones, with 457 stocks declining compared to 103 that advanced, and 15 stocks remaining unchanged on the Istanbul Stock Exchange.
Commodities and Currency Movements
In commodities trading, Gold Futures for December delivery saw a modest increase of 0.10%, or 2.45 points, to reach $2,548.75 per troy ounce. Crude oil prices also rose, with October delivery crude oil up by 3.02%, or 2.26 points, to $77.09 per barrel. The November Brent oil contract increased by 2.44%, or 1.91 points, trading at $80.06 per barrel.
In the currency markets, the USD/TRY exchange rate was up 0.14%, reaching 34.01, while the EUR/TRY exchange rate fell by 0.20%, settling at 37.98. The US Dollar Index Futures increased by 0.12%, trading at 100.73.
Broader Economic Context
The steep decline in Turkey’s stock market in August reflects broader economic challenges, including the impact of stringent monetary policies aimed at curbing inflation and stabilizing the economy. These policies have put pressure on corporate profits and investor sentiment, contributing to the significant market losses.
The Turkish Central Bank’s recent moves to tighten monetary policy have been a response to high inflation and economic instability. However, these measures have also led to increased borrowing costs and financial strain on businesses, which in turn has negatively affected stock market performance.
Looking Ahead
As Turkey navigates these economic challenges, market observers will be closely watching for any new policy adjustments or economic stimuli that could potentially stabilize the stock market and support corporate profitability. The ongoing volatility in the Turkish stock market highlights the need for investors to remain vigilant and consider the broader economic factors influencing market movements.
I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna Sahu holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.
