Turkey’s blistering stock rally has hit reverse as juicy interest rates lure savers out of the market and foreign investors cash in on recent gains.
Istanbul’s benchmark Bist 100 index dropped 8 per cent in August, its biggest decline since President Recep Tayyip Erdoğan shook markets in October 2023 when he strongly criticised Israel for its offensive in Gaza. MSCI’s Turkey benchmark, which tracks the performance of the market in US dollar terms, fell about 10 per cent, the worst rout of any country in the index provider’s widely followed emerging markets gauge.
The pullback in Turkish stocks highlights how Ankara’s attempt to rein in scorching inflation with a sweeping economic overhaul is rippling through the country’s capital markets and $1tn economy.