The BIST 100 index ended the day lower, falling 111.63 points from the previous close. The index's total trading volume reached 232.3 billion Turkish liras.
The banking index fell 1.06%, while the holding index lost 0.23%. Among sector indexes, sports posted the biggest gain at 2.23%, while metal products and machinery recorded the sharpest decline at 2.51%.
Central bank keeps policy rate unchanged
The Monetary Policy Committee of the Central Bank of the Republic of Türkiye kept the policy rate, the one-week repo auction rate, at 37%.
The committee assessment said that data on economic activity and the limited pass-through of supply shocks to domestic prices confirmed the weak course of domestic demand. It also said that elevated energy prices driven by geopolitical developments posed an upside risk to the inflation outlook.
Interest rate and inflation pressures in global markets
The European Central Bank raised its three key policy rates by 25 basis points each, in line with expectations, in response to the energy crisis triggered by ongoing tensions in the Middle East and renewed price pressures.
In the United States, the Producer Price Index rose 0.4% month on month and 5.4% year on year in August. The annual increase exceeded expectations.
Global markets followed a negative course amid the impact of escalating conflicts in the Middle East, while expectations that the U.S. Federal Reserve could raise interest rates because of inflationary pressures strengthened selling pressure.
Data to watch in the markets
Market participants will monitor the balance of payments and the market participants survey in Türkiye, as well as a busy data agenda abroad, led by U.S. inflation figures.
The inflation data due to be released in the United States could determine the direction of markets and expectations regarding Federal Reserve policy. From a technical perspective, 14,300 and 14,200 points stood out as support levels for the BIST 100 index, while 14,400 and 14,500 points were identified as resistance levels.
Economists participating in the AA Finance Balance of Payments Expectations Survey expect the current account to post a surplus of $582.3 million in July. They forecast a year-end current account deficit of $51.054 billion.
