Newsletters
Türkiye's benchmark stock index, BIST 100, opened the week 1.5% lower on Monday after a 5% loss last week, as political turmoil deepened between the main opposition Republican People's Party (CHP) and the ruling Justice and Development Party (AK Party) over a court decision that removed the opposition party’s Istanbul chair.
The index fell 161.16 points, or 1.50%, from the previous close to 10,568.33. The banking index lost 1.99%, while the holdings index declined 1.79%.
During the first hour of trading, losses deepened to 2% before easing slightly to 1.6%. Due to this movement, the "uptick rule" was triggered and will remain in effect until the end of the session for short-selling transactions in eligible equities.
Tensions erupted after a court annulled the CHP’s 2023 Istanbul Congress last week over bribery accusations, removing the provincial chair and appointing a trustee in his place.
Before the court decision, the BIST 100 index was trading above 11,300 points, near its all-time high of 11,500 points reached in late August. The level reflected a 25% rally since June, supported by a positive outlook following the Turkish central bank’s resumption of rate cuts.
The situation escalated further over the weekend when police blocked access to the CHP’s Istanbul provincial headquarters to facilitate the trustee administration’s arrival at the building. The Istanbul governor imposed a three-day ban on demonstrations across six central districts, citing security concerns.
Following the news, CHP supporters gathered outside the building, while the party called on its members of parliament and Party Assembly delegates to assemble at the headquarters. Supporters attempted to prevent entry by trustee Gursel Tekin and two other court-appointed officials, who later withdrew after talks with CHP leader Ozgur Ozel.
The Turkish court is scheduled to hear the case on September 15 regarding the CHP’s 2023 general electoral congress, a ruling that could endanger the party’s central leadership by potentially removing it and appointing a trustee. According to three possible scenarios, the court could annul the party’s current leadership and appoint a trustee, assign a committee to convene an extraordinary congress within 45 days, or issue a procedural delay pending other court proceedings.
The date casts a shadow over the Turkish central bank’s monetary policy meeting on September 11, as policymakers had been expected to continue rate cuts after resuming with a 300-basis-point reduction in July that brought the policy rate to 43%.
However, following political tensions and weaker August inflation data, doubts have emerged over whether policymakers will maintain the expected pace of cuts, opt for a smaller reduction to signal caution, or, in the worst-case scenario, pause the easing cycle altogether.
From a technical perspective, analysts noted that the BIST 100 index has support levels at 10,500 and 10,400 points, while resistance is seen at 10,600 and 10,700 points.
1 min read
1 min read
