The index, which hit 51,380.65 in the last week of October, setting a three-month high, had plunged to 46,244.43 at the end of the first session of trading yesterday. According to experts this plunge has its roots in political occurrences within Turkey, especially the recent introduction of the democratic initiative in Parliament and the rumored possibility of a second closure case against the ruling Justice and Development Party (AK Party).
Recent warnings from experts that the global recession could be a double-dip recession and a warning from Templeton Emerging Markets Fund President Mark Mobius that the İMKB might fall in the short run due to “necessary corrections” led to the İMKB's decline to a two-month low on Thursday.
According to Ersagun Şimşek from Tera Stock Brokers "increasing political risks are adding to the pessimism" in the markets.
Political concerns, such as the heated arguments in Parliament regarding the recent democratic initiative put forth by the AK Party and a “legal investigation of political parties” by Chief Prosecutor Abdurrahman Yalçınkaya that could lead to another closure case against the AK Party, have scared away investors, according to experts.
While Russia’s stock market rose by 0.78 percent on Wednesday along with other increases in global markets, the İMKB-100 dropped by nearly 2 percent in a single day. The first session of Thursday’s trading closed at 46,244.43, a 10 percent drop from the three-month peak. The unexpected drop in US home construction and residential building permits, revealed yesterday, also sent US and international stocks plunging. Experts say that this drop along with the weak performance of European stock markets had a detrimental effect on the İMKB index. Şimşek has stated that investors need to be “vigilant” regarding their investments and that there are “vague implications” for an economic recovery.
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