'Artificial intelligence' crack in global markets: All eyes on CBRT's interest rate decision

Global markets completed the week with a mixed course due to the impact of US inflation data, geopolitical risks in the Middle East and fluctuations in the artificial intelligence sector. In the new week, all eyes will be on the decisions of central banks, intense data flow and the balance sheets of giant companies.

INFLATION AND CHIP CONCERNS IN THE USA

Annual inflation in the USA has reached its peak in the last 4 months due to the impact of increasing energy costs. Data that exceeded expectations strengthened the possibility that the US Federal Reserve (Fed) may increase interest rates. Emphasis on "restrictive monetary policy" from Fed officials and concerns that high interest rates would hit artificial intelligence investments led to sharp sales in technology stocks. China's CXMT's progress in chip production has also raised fears of competition in the industry.

With these developments, Nasdaq decreased by 4.48 percent and S&P 500 decreased by 1.95 percent on a weekly basis, while Dow Jones increased by 0.67 percent. The third quarter balance sheets from the US giant banks showed a mixed view in the profit and loss table. The financial results of Meta and Tesla will be closely watched in the USA next week.

EUROPE IS POSITIVE, HISTORICAL DECLINE IN ASIA

European stock exchanges; It closed the week with an increase due to the positive signals coming from the company's balance sheets and the impact of purchases in energy and defense stocks. FTSE 100 in England gained 3.09 percent and DAX in Germany gained 2.14 percent.

On the Asian front, global sales pressure in technology stocks had a seismic effect. The technology-focused Kospi index in South Korea recorded the sharpest weekly decline in the last 18 years, falling 14.46 percent, led by the meltdown in the shares of technology giants. In China, inflation data that was below expectations put pressure on the markets, indicating that domestic demand had weakened.

DOMESTIC EYES ON CBRT'S INTEREST RATE DECISION

A sales-heavy week has passed at Borsa Istanbul. While the BIST 100 index lost 4.44 percent of its value on a weekly basis and dropped to 11,721.72 points, Dollar/TL finished the week at 49.5140.

Minister of Treasury and Finance Mehmet Şimşek stated that legal regulations will be completed by the beginning of 2027 to combat capital market crimes; CBRT President Fatih Karahan emphasized that domestic residents' interest in TL assets continues to remain strong.

The main agenda item in domestic markets next week will be the CBRT interest rate decision, which will be announced on Thursday. Economists' expectation is that the CBRT will reduce the policy rate by 100 basis points to 36 percent.