Turkey's main stock index entered a bear market and recorded its worst monthly performance since 2008 in September, after a selling wave triggered by liquidity-strapped investment funds spread to the broader market.
The index closed 2.79 percent lower on Wednesday, becoming more than 20 percent below the record closing level recorded on May 11, confirming its entry into a bear market. It ended September down 16.65 percent.
The selling wave accelerated on September 14 due to concerns about funds with high exposure to low-trading stocks. Some funds were forced to sell liquid holdings to meet redemption requests, leading to broader declines and triggering more divestment requests, analysts said.
The index fell by more than 8 percent in the week ending September 18, recording its worst weekly performance since March 2025, when the imprisonment of Istanbul Mayor Ekrem Imamoglu led to a sharp selling wave.
On September 17, the Turkish Capital Markets Authority (SPK) ordered the liquidation of 131 funds that manage more than $20 billion and serve 455,758 individual investors.
Since then, regulators have expanded their investigations into allegations of manipulation in stock and fund markets. Justice Minister Akin Gorlik said on Wednesday that the number of suspects had risen to 217 people, including 56 detainees awaiting trial.
Small stocks suffer the biggest losses
The Istanbul Index of companies outside the list of the 100 largest companies, which includes 484 companies, has outperformed the benchmark index since the beginning of 2025. However, the difference narrowed sharply after the Turkish Capital Markets Authority in late August imposed restrictions on the size of the fund’s assets that can be concentrated in individual companies.
The index fell about 35 percent in September, recording its worst monthly performance in lira terms since its launch in 2009.
In contrast, the index of the largest 30 stocks, which includes blue-chip stocks, declined at a slower pace, ending September down 9.8 percent.
As for the index, which includes the remaining 70 stocks within the 100 largest companies, it bore the brunt of the selling wave since January 2025, as 15 of its components lost between 50 and 90 percent of their value in September, according to data collected by LSEG.
Russia's manufacturing sector contracted slightly in September, as weak demand led to a continued decline in production and new orders, a business survey published on Thursday showed.
A survey conducted by Standard & Poor's Global showed that the purchasing managers' index for the Russian manufacturing sector, seasonally adjusted, rose to 49.8 points in September from 48.8 points in August, noting that the level of 50 points separates growth from contraction, according to Reuters.
Production decreased for the second month in a row, although the pace of decline was slower compared to August, and companies attributed the decrease in production to weak demand and the slow flow of new orders.
New orders also declined for the second month in a row, with companies citing rising prices and intensifying competition as reasons for the decline. Export orders fell for the eleventh month in a row, and at the fastest pace since May 2022.
Employment fell for the tenth month in a row, marking the fastest pace of job cuts since May. Companies attributed the decline in employee numbers mostly to the failure to appoint replacements for workers who left their jobs voluntarily.
Cost pressures remained noticeable, but fell to their lowest level in three months, while product price inflation slowed to its weakest level since June. Supplier delivery times also rose by the most since October 2024, amid transportation delays and logistical problems.
Manufacturers expressed greater optimism about next year's expectations, as the level of optimism rose to its highest level in three months, driven by hopes of increasing demand and attracting new customers, despite the level of confidence remaining below the historical series average.
India's manufacturing sector expanded at a sharp pace in September, ending a three-month slowdown, with strong demand pushing factory activity growth to the fastest pace in seven months, resuming hiring and boosting business confidence, according to a special survey released on Thursday.
The HSBC India Manufacturing Purchasing Managers' Index, compiled by Standard & Poor's Global, rose to 55.1 points in September from a 5-year low of 52.8 points in August, but came below the initial estimate of 55.7 points.
The reading was the highest since February. An index reading exceeding 50 points indicates growth in activity.
New orders rose at the fastest pace since February, driven by increased demand for electronic, food, pharmaceutical and textile products, according to the survey. Export orders also accelerated, with manufacturers citing increased demand from customers in Brazil, Europe, the United Arab Emirates and the United States.
Production rose sharply, with the pace of expansion accelerating to the strongest level since May, supported by new commercial orders and rising demand.
“Companies purchased more materials and increased their inventories in preparation for expected sales,” said Pranjul Bhandari, chief economist at HSBC in India. Finished goods inventories recorded their second largest increase in nearly 12 years, indicating a clear shift from low inventory levels.
High demand also led to a resumption of hiring. The number of workers grew at the strongest pace since May, recovering from an actual decline in August, the first decline in industrial jobs in two and a half years.
Business confidence rose to a four-month high in September, driven by optimism stemming from a surge in new inquiries and expectations of continued demand.
Cost pressures rose, with input cost inflation accelerating compared to August, driven by higher prices for electronic components, pharmaceutical products and steel. However, the inflation rate remained below its long-term average. Selling prices also increased compared to August, although the increase was modest and at a pace that also remained below the general trend.
Inflation remained above the Reserve Bank of India's 4 percent medium-term target for the third straight month in August, driven by a sharp rise in energy and food costs. To combat rising inflation, the Reserve Bank of India is expected to raise interest rates by a total of 50 basis points this year to 5.75 per cent.
