Economy in Turkey:  What will be the direction in Borsa Istanbul?

After the sharp decline in Borsa Istanbul yesterday, investors are now focused on whether the losses will deepen. Following the increased geopolitical tension, the BIST 100 index had dropped by around 7 percent last week, but this week, both Monday and Tuesday saw an increase of over 3 percent, recovering its losses. After Erdogan’s statements yesterday however, the index dropped by 7 percent.

The index lost 7.08 percent yesterday, closing at 7,424.97 points. The BIST 100 index fell by 565.45 points compared to the previous closing. Meanwhile, the circuit breaker system associated with the index was activated twice on Borsa Istanbul.

Today, at the opening, the BIST 100 index started the day with a 1.23 percent increase at 7,516.50 points. The index showed significant volatility in the morning sessions.

ERDOGAN EFFECT ON THE STOCK MARKET

Experts pointed out that President Erdogan’s statements about Israel and Hamas were influential in yesterday’s sharp decline in the stock market. President Recep Tayyip Erdogan stated in his speech at his party’s parliamentary group meeting yesterday, “We had a project to go to Israel, we canceled it.”

Regarding Hamas, Erdogan also said, “Hamas is not a terrorist organization, it is a group of liberation and mujahideen struggling to protect their land and citizens.”

Investors are now watching whether the losses will deepen or not. According to experts, while the Israel-Palestine conflict continues to pose a risk to asset prices, geopolitical tensions and statements by national leaders may lead to escapes from risky assets.

WHY DID THE STOCK MARKET DECLINE?

Mert Yılmaz, Deputy General Manager of Info Investment, who commented on the matter to Sozcu.com.tr, said, “The market was already struggling to stay above 8,400. A stagnation, a correction excuse was being sought from there.”