Turkish markets react to inflation figures post-election, putting dollar and stock market under pressure

Omer Faruk Bingol Exclusive - Following the announcement of a 3.16% inflation rate for March, the real returns of investment instruments have come to light for Türkiye. Gold, whose price rose by 14% in March, achieved the highest return against inflation.

Turkish lira deposits surpassed inflation with a return of 3.75% as the dollar rose by 3% in March, keeping pace with the Consumer Price Index (CPI). However, the stock market lost ground against inflation, dropping by 2.7% last month.

The aftermath of local elections has seen a third trading day unfold. Observations reveal an acceleration in the flight from foreign currency, increased selling in the stock market, and a slight turnaround in gold from record levels.

In the free market, the dollar slid below 32.00 TL, closing the day at 31.95. Gram gold reached an intraday peak of ₺2360 before retreating to ₺2345. The BIST100 index on the Istanbul Stock Exchange closed at 8945 points, down by 1.05%.

Performance of Investment Instruments

The Turkish Statistical Institute (TÜİK) announced inflation figures for March on April 3, with the CPI showing a 3.16% increase. The real returns of investment instruments for March have also been revealed. Gold saw a 14% increase in March, providing the highest return against inflation. TL deposits also emerged victorious against March inflation with an average return of 3.75%. The dollar, with a 3% increase, kept pace with the CPI in March. However, the BIST100 index, dropping by 2.7% last month, failed to protect investors during this period.

Potential Acceleration in Dollar Sales

Mehmet Aşçıoğlu, Board Advisor at Tacirler Investment Management, noted that even the smallest savers bought dollars with fear post-March 31 elections. He stated, "If the weak trend in the dollar continues, we may see that positions taken before the elections will need to be converted to TL in a short time. Because there will be a need for this liquidity, both by individuals and companies. We may observe this conversion more prominently within approximately three weeks."

Attention to the Stock Market Below 9000 Points

Economist Nuri Sevgen reminded investors of the upcoming long holiday and suggested that the stock market could face pressure this week. He said, "Especially due to the high-interest costs of carrying margin positions, there may be some reluctance. We know that there are significant positions in stocks carried with margin. The 9000 level in the index is very critical; if it stays below this level, the charts may turn downward again. The 8700s could be back in play. Investors should be cautious."

Source: Newsroom