All earnings of the year melted away! Collapse of confidence in Borsa Istanbul: Here is what happened on the last day of the week...

Borsa Istanbul (BIST 100) provided its investors with breathtaking hours on the last trading day of the week. The erosion of confidence that started with the fund investigations that broke out about 40 days ago, combined with the turbulence in global markets and the Central Bank's (CBRT) steps that did not match market expectations, resulted in a sharp break in the stock market. Although the index, which crashed to the level of 10 thousand 800 points during the day and erased all the gains of the year, turned its direction upward again with the reaction purchases in the following hours, the fragility and uneasiness in the market continues.

Borsa Istanbul, where the target of 15 thousand points was announced two months ago, is struggling to exist under the pressure of both internal and external dynamics as of today.

WHY DID THE INTEREST REDUCTION NOT HELP THE MARKET?

In past years, the interest rate cut cycles of the Central Bank of the Republic of Turkey (CBRT) served as a strong catalyst for stock markets. However, the last 100 basis point surprise cut by the CBRT in the policy rate, this time, far from creating the expected spring atmosphere in the stock market, accelerated the outflow. Following the decision, losses in the BIST 100 index exceeded 3 percent, while the selling pressure deepened further on the last day of the week. This situation was the clearest indication that the market is no longer focused only on macroeconomic interest rates, but also on structural trust issues and legal grounds.

FUNDING INVESTIGATIONS AND LOSS OF TRUST

At the epicenter of the internal collapse in the stock market lies the "fund investigations" that started about 40 days ago and are gradually deepening. The successive allegations of manipulation and irregularities in the capital markets severely damaged the confidence of domestic investors in the system. The expansion of the scope of the investigations caused institutional investors to shrink their positions and a serious capital outflow from the market. In a conjuncture where foreign investors were already distant, domestic investors' flight from risky assets in search of a "safe haven" increased the momentum of the decline.

ALL EARNINGS OF THE YEAR MELTED

After falling below the psychological limit of 11 thousand points, BIST 100 index returned all the gains it made in 2026 to its investors. The banking and communication sectors, which are the locomotives of the index, took the biggest blow from the panic sales during the day.

The depreciation in the banking index exceeded 6 percent at one point, pulling the market down.

The communication index was the sector that lost the most blood, with a sharp decline of over 8 percent.

While losses in financial and industrial indices were limited to 5 percent, the technology index decreased by 4 percent and the BIST All Index decreased by 3.5 percent.

Although the bottom purchases after midday compensated for some of the sectoral losses, the heavy damage to the boards remains permanent.

TROUBLE CONTINUES ON THE GLOBAL FRONT

The outer leg of the storm that hit Borsa Istanbul is the "inflation and interest" spiral in global markets.

The barrel price of Brent oil increased by more than 4 percent to over 114 dollars due to geopolitical risks and supply concerns in the Middle East, resurrecting the nightmare of energy costs and inflation all over the world. This situation strengthened the expectation that the US Federal Reserve (Fed) will maintain its hawkish stance at its upcoming meeting and may even tighten monetary policy further.

Rising US bond yields accelerated the flight from global stock markets, led by technology stocks. While the technology-heavy Nasdaq 100 index in the USA lost nearly 3 percent of its value, the picture was no different in European stock markets. The London Stock Exchange had a sell-out day, with declines of 0.6 percent and Frankfurt and Paris stock exchanges falling nearly 1 percent.

As a result, Borsa Istanbul; It is stuck between the trust gap created by fund investigations and dysfunctional monetary policy at home, and rising energy costs and global tightening concerns abroad. Although the latest reaction purchases try to keep the index above water for now, the dark clouds on the horizon have not dispersed yet.