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Markets Focus on Inflation as Borsa Istanbul Struggles to Break Resistance

borsa enflasyon

Turkey’s November inflation data, due on 3 December, is expected to show a sharp slowdown, reinforcing expectations of a rate cut at the 11 December CBRT meeting. Despite easing bond yields and a supportive macro backdrop, Borsa Istanbul continues to face persistent resistance above the 11,000 level amid weak inflows, risk aversion, and muted domestic investor appetite.

Inflation Forecast Bolsters Expectations for December Rate Cut

Turkey will release November CPI figures on 3 December, with the median market estimate at 1.25%, down sharply from September’s 3.23% and October’s 2.55%.

CBRT Governor Fatih Karahan’s recent comments signalling sustained disinflation were well received by markets. With inflation still the key reference point for monetary policy, a continued slowdown is widely expected to pave the way for another rate cut on 11 December.

İşbank CEO Hakan Aran has publicly signalled expectations for a 100–150 bps cut, a view broadly shared across financial circles.

Borsa Istanbul Ends the Week Flat Despite Supportive Signals

Borsa Istanbul finished last week in a nearly flat, sideways trend, with the BIST 100 index posting almost zero weekly change.

This stagnation stands out given:

  • A mild rise in exchange rates

  • A notable decline in benchmark bond yields toward 38%

  • Growing conviction that CBRT will continue cutting rates

Despite the drop in yields — the index’s strongest alternative — the BIST 100 showed little reaction. Analysts highlight that next week’s market direction could shift depending on political and macroeconomic headlines.

Why the BIST 100 Cannot Break Above 11,000

Even with supportive indicators, the BIST 100 index continues to struggle at and above the 11,000-point resistance, facing renewed selling pressure at each attempt.

Market observers point to a simple explanation:
Lack of fresh capital inflows and lack of confidence.

Several factors feed this dynamic:

  • Despite falling yields, interest rates remain relatively high.

  • The ongoing surge in gold prices keeps investor attention on safe havens.

  • Local investors have yet to rotate meaningfully back into equities.

  • “Stocks rise because people buy them” — but demand remains weak.

If inflation slows as expected and the CBRT proceeds with a rate cut, this could gradually shift sentiment — provided the political environment remains calm.

Foreign Inflows Still Limited; Company Earnings Weighed Down by Inflation Accounting

Foreign investor appetite for Turkish equities remains muted, with no noticeable increase in recent weeks.

At the micro level, inflation accounting continues to pressure corporate profitability. Many of Borsa Istanbul’s heavyweight companies reported declining earnings compared to previous years. Price-to-earnings ratios are neither excessively high nor attractively low, leaving the market range-bound.

Borsa Istanbul Lacks the Tech Momentum Driving Global Markets

Global equity rallies — led by the “Magnificent Seven” (Nvidia, Apple, Microsoft, Amazon, Alphabet, Meta, Tesla) — are driven by AI and tech momentum.

Borsa Istanbul, however, lacks a similar set of high-impact technology stocks. Aside from Aselsan, few companies resemble the growth or scale of global tech leaders. This structural gap limits the index’s ability to mirror the powerful uptrend seen in U.S. markets.

Technical Outlook: Resistance Remains Strong

The BIST 100 continues to trade within a defined technical structure:

  • First support: 10,815

  • Next support: 10,700

  • Lower supports: 10,440 – 10,370

  • First resistance: 11,040

  • Key resistance: 11,160

  • Bullish extension targets: 11,550 – 11,600

While buyers consistently emerge at support levels, the index has struggled to break above and sustain moves beyond key resistance levels.

Adopted from Zeynel Balci article published in Hurriyet Daily

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