FX.co ★ Turkish Stocks Soar as PKK Announces Dissolution

Turkey's BIST 100 index surpassed the 9,600 level in mid-May, further recovering from previous declines. This upward movement followed an unprecedented announcement by the Kurdistan Workers' Party, declaring an end to its armed conflict and its dissolution after four decades. This development marks a significant step toward addressing one of Turkey’s longstanding security issues and could have broader implications for regional stability. Despite the recent uptick, the benchmark index still remains approximately 2% lower since the start of the year, as investors continue to grapple with political uncertainty and economic challenges. The arrest in March 2025 of Istanbul Mayor Ekrem Imamoglu, who is a key political opponent of President Erdogan, sparked considerable market turbulence and intensified apprehensions concerning domestic political risks. However, since mid-April, Turkish markets have regained some semblance of stability, bolstered by central bank measures aimed at supporting the lira, including foreign exchange sales and consecutive interest rate hikes in March and April.