Gamze BAL
Created Date: October 30, 2024 04:00
According to experts, Borsa Istanbul BIST 100 index is looking for a new story to enter the upward trend again. It is stated that with the Central Bank (CBRT) starting to reduce interest rates, an upward trend will begin in the stock market again. The rate of inflation in October and November will be effective in the Center’s decision to reduce interest rates. The reduction in interest rates may extend to 2025.
This The skid in recent months continues in the BIST 100 index, which tested record levels in the first half of the year due to factors such as the normalization of monetary policy that supported the market, improvement in CDSs, foreign investor interest and rating increases. The index has lost more than 20 percent of its value since it tested its historical peak of 11 thousand 245 points. It is stated that in addition to global developments, weak balance sheets in the country, investors turning to return instruments such as deposit interest and gold that rival the stock market, and foreign investor interest not being at the expected and desired level are also effective in the weakening of the upward momentum since July.
According to experts who gave information to Hürriyet, the stock market is looking for a new story to enter the upward trend again. It is stated that with the Central Bank (CBRT) starting to reduce interest rates, an upward trend will begin in the stock market again.
INCREASE TREND EXPECTATION AGAIN
Info Investment Strategist Çağlar Toros said, “The current course of the stock market has been influenced by the fact that risk-free returns such as deposit interest remain sufficient against inflation. On the other hand, balance sheets due to inflation accounting do not appear strong, and as growth shrinks, the stagnation in the economy is reflected in the financials of companies. All of these caused the dynamics in the domestic markets to reverse. “The stock market has entered a downward trend,” he said. Pointing out that the third quarter financials will not be good, Toros said, “However, upward movements may restart in Borsa Istanbul with new stories in the medium term. Because the market needs a new story. “The interest rate cut seems to present the biggest story,” he said.
Gedik Investment Consultancy Deputy Manager Onur Can Bal also pointed out that, like Toros, the new story the market is waiting for is interest rate cuts.
“As there was no inflow of hot money, domestic investors were stuck in stocks and turned to the returns of alternative products. “When foreigners do not come, we see such a delay in the stock market,” said Bal, adding, “We are not negative about the medium and long term. Because when interest rate cuts start, October inflation data will come next week. If we see good data, it may boost morale in the market. S&P has a rating decision this Friday. We are waiting for a decision like Fitch, that is, it is expected to increase the rating and change the outlook to stable. These may give morale to the market, but the real expectation that will recover the index is that the CBRT will start reducing interest rates and the arrival of foreign investors. “This could literally extend to 2025,” he said.
IN FOREIGN CPI HEALING IS WAITING
The rate of inflation in October and November will be effective in the CBRT’s decision to cut interest rates. Gedik Investment Consultancy Deputy Manager Onur Can Bal said, “The expectation of a rating increase from S&P on Friday may support the recovery in the index. However, the market needs to see that inflation has entered an improvement trend. Because foreign investors first expect clearer signs that inflation is on a downward trend. Secondly, he expects interest rate cuts to start when the conditions are met,” he said. “If it is supported together with these, there will be a meaningful, strong rise,” said Bal, and continued: “Because we have strong resistances. First, the index rises to the threshold of 9 thousand 200 to 9 thousand 400 points; Then it will reach the 9 thousand 700-10 thousand point band… I expect to see an index that rises gradually after these levels are exceeded, takes a breather. Once the road map for interest rate cuts becomes clear, a more meaningful upward trend will begin. This will bring new peaks next year.”
Source: bigpara.hurriyet.com.tr
