Borsa Istanbul Plunges as Prosecutor Seeks to Shut Down CHP and Indicts İmamoğlu

Borsa Istanbul suffered sharp losses on Tuesday after two major political shocks hit the market: the release of a 3,900-page indictment seeking up to 2,352 years in prison for Istanbul Mayor Ekrem İmamoğlu, and the prosecutor’s notification to the Court of Cassation regarding a case to close the Republican People’s Party (CHP). The BIST 100 index fell more than 4% intraday, triggering circuit breakers and forcing exchange-wide restrictions on short selling.

Political turmoil triggers sell-off

The day began calmly, with BIST 100 opening slightly higher at 10,810.62 points. But as headlines regarding İmamoğlu’s indictment spread, the index slipped below 10,600, and volatility surged.

• 14:30 — İmamoğlu indictment made public:
  BIST 100 was trading around 10,780.

• 15:00 — Early selling begins:
  Index slid to 10,755.

• 15:30 — Prosecutor notifies court seeking closure of CHP:
  Sharp sell-off begins. Losses exceed 3%, pushing BIST 100 to ~10,390.

At its lowest point, losses surpassed 4%, before partial recovery trimmed the decline to –1.67% by late session.

Banking stocks were hit even harder:

• Banking index dropped more than 5% intraday.

Circuit breakers and trading restrictions activated

As the crash accelerated, Borsa Istanbul triggered automatic volatility controls:

• Multiple stocks were halted temporarily

• The exchange imposed a “uptick rule” on short selling for the rest of the session

• Official notice was released on the Public Disclosure Platform (KAP) at 15:25:49

The market reaction was driven not only by İmamoğlu’s indictment but also by the prosecutor’s additional request to initiate a closure case against the CHP, the country’s main opposition party.

Background: İmamoğlu faces 2,352 years in prison

The indictment, completed after 237 days, names İmamoğlu as “Suspect No. 1”, accusing him of criminal organization leadership, bribery, bid rigging, and money laundering.
Prosecutors are seeking up to 2,352 years in prison.

The same filing includes:

• 402 suspects

• Alleged losses of 160 billion TL

• A political escalation not seen in decades, according to opposition figures

Markets already sensitive to political risk

Global sentiment had been improving after progress in Washington toward ending the U.S. government shutdown lifted emerging-market assets. The MSCI Emerging Markets Index rose 1.3% on Monday — its best performance in two weeks.

But political instability in Turkey overwhelmed that broader risk-on mood.

Key technical levels

Analysts continue to watch the following support/resistance zones on BIST 100:

• Support: 10,700 / 10,600

• Resistance: 10,900 / 11,000

While the indictment soured moods on Borsa Istanbul, the negative sentiment is expected to be short-lived, as investors had already discounted the prospect of President  Erdogan using all means at his disposal to eliminate CHP and Ekrem Imamoglu from the next elections.  The currency market was calm, with dolar/TL closing the day flat.  PATurkey can’t find any news reports suggesting unusual increases in hard currency demand by domestics.

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