FX.co ★ Turkish Stocks Rebound

Turkey's BIST 100 index experienced a rise, reaching 10,620 after dipping to a three-month low of 10,200 on October 17th. This upturn was primarily fueled by the banking and defense sectors, amid market analysis of ongoing macroeconomic challenges and political uncertainties. Aselsan shares climbed above TRY 200, representing a remarkable 180% increase since the beginning of the year. This is in line with the performance of European defense companies, driven by heightened geopolitical tensions between Russia and Ukraine that have led NATO members to boost their military expenditures. Simultaneously, Garanti Bankasi and KOC saw a bounce back from their mid-October lows. Investors are closely watching a crucial court hearing aiming to dissolve the main opposition party, CHP, led by President Erdogan’s primary political adversaries. Any negative ruling against the party could lead to a sharp selloff in Turkish assets, akin to the reaction in March when Istanbul Mayor Imamoglu faced arrest prior to a potential presidential run. Additionally, the Central Bank of Turkey (TCMB) implemented a 100 basis points interest rate cut, though it also signaled caution about potential inflationary pressures.