MARKET PREVIEW: Turkish Markets Brace for Volatility Amid Escalating Iran Conflict and Key Inflation Data
sabah-bulten
ANKARA/ISTANBUL — Turkish financial markets are entering a high-stakes trading session this Tuesday, caught between a widening regional war and critical domestic economic data. As the conflict involving the U.S., Israel, and Iran spreads to Lebanon and Cyprus, the functional closure of the Strait of Hormuz has sent shockwaves through global energy corridors and supply chains.
BIST-100: Rebounding from a “Black Monday” Gap
The Borsa Istanbul (BIST-100) experienced a turbulent start to the week. On Monday, the index opened with a massive 5.32% downward gap as investors reacted to the first wave of strikes on Iran. While the index touched a daily low of 12,987 points—testing its 50-day moving average—a late-session recovery helped trim losses.
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Closing Figures: The index ended Monday at 13,346.43, down 2.71%.
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Sector Performance: Banking took the heaviest hit, with Akbank (AKBNK) and Yapı Kredi (YKBNK) leading the decline, alongside Turkish Airlines (THYAO).
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Technical Outlook: Analysts at A1 Capital note that technical indicators like RSI and MACD remain firmly in negative territory. While 13,000 stands as a psychological and technical support floor, a sustained move above 13,450 is required to confirm a short-term relief rally.
Trump’s Warning: “The Big Wave is Coming”
Global risk appetite remains suppressed following statements from U.S. President Donald Trump late Monday. Trump signaled that the military campaign against Iran is ahead of schedule but warned that “the big wave” of strikes is yet to come and that the war could be prolonged.
The Iranian retaliatory strikes on Gulf states and the blockade of the Strait of Hormuz—where 20% of the world’s oil flows—have pushed energy prices higher. For Turkey, an energy-dependent economy, this introduces significant upside risks to the inflation outlook.
Domestic Focus: February Inflation & Central Bank Policy
While geopolitical headlines dominate, the domestic economic calendar features the release of February Inflation (CPI) data today.
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Forecasts: Markets expect a monthly increase of 3.0%, pushing annual inflation to 31.55%.
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Impact: This data is paramount for the Central Bank of the Republic of Turkey (TCMB), which meets next week to decide on interest rates. Persistent price pressures in services and food, fueled by recent minimum wage hikes, may force the bank to maintain a more hawkish stance than previously anticipated.
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Emergency Regulatory Measures
In response to the extreme market volatility, Turkish regulators have moved to stabilize the financial system:
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Short-Selling Ban: The Capital Markets Board (SPK) has banned short-selling on the Borsa Istanbul until the end of the session on March 6.
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Liquidity Tightening: The TCMB has temporarily suspended 1-week repo auctions to tighten Lira liquidity and has launched Lira-settled forward foreign exchange sales to curb volatility in the USD/TRY pair.
Opening Expectations
With Asian markets trading mostly in the red and U.S./European futures showing negative momentum, the BIST-100 is expected to start the day on a negative note. Investors are advised to remain cautious as geopolitical developments will likely override traditional economic data in driving price action today.
PATurkey news desk
