Turkish stocks tumbled, extending their 2023 slump, as panic selling deepened among local investors, triggering market-wide circuit breakers for a second time this year.
The Borsa Istanbul 100 Index fell 5.2%, closing at the lowest level since Nov. 21. The benchmark has plunged 16% since hitting a record last week and is by far the worst-performing equity gauge so far this year. Shares of Turkish Airlines — last year’s best-performing stock — and lender Akbank have led declines in 2023, falling 11% and 18%, respectively.
A report that a new case has been brought against Istanbul’s opposition mayor Ekrem Imamoglu came after a trading halt shortly before the market closed.
“Local investors that are trading with very high leveraged positions are selling in fear and panic,” said Haydar Acun, managing partner of Marmara Capital in Istanbul. “Even a small sale triggers a big impact as it disrupts the market.”
The market’s 30-day volatility has surged to the highest level in a year.
While Turkish stocks continue to appeal to local investors as a hedge against high inflation, last year’s almost 200% gain makes them more fragile in a selloff.
The country’s market regulator said late Tuesday that it’s monitoring transactions at Borsa Istanbul “in real time.” It said it will impose criminal sanctions on anyone found responsible of any actions that disrupt the capital market’s functioning.