FX.co ★ Turkish Stocks Hold Near Record

In February, Turkey's BIST 100 stock index soared to a new peak of 13,800, driven by robust performances in the defense intelligence and financial sectors. This surge comes as investors gauge whether current macroeconomic conditions will remain favorable for equities throughout the year. Notably, Aselsan shares skyrocketed by almost 300% from the previous year, spurred by increased defense expenditures among NATO nations amid rising geopolitical tensions across Europe and the Middle East. The banking sector also excelled in recent quarters owing to the stabilization of domestic inflation, albeit still elevated, which was propelled by continued credit activity following an extended period of unconventional monetary policy by the central bank. The anticipated depreciation of the lira has further incentivized investors to turn to more volatile assets like equities as a hedge against inflation. Last month, the Central Bank of the Republic of Turkey (TCMB) reduced its benchmark interest rate by 100 basis points, lower than the anticipated 150 basis points cut, yet reiterated its forecast for core inflation to persist in its downward trend this year.