Despite the overall global market decline triggered by concerns related to sub-prime mortgage risks in the US, stocks in Turkey moved horizontally yesterday.
The İstanbul Stock Exchange (İMKB) benchmark İMKB-100 Index, fell below 50,000 points during the early trading session after hovering above it for a one-month period. However, the index bounced back after encountering purchases, and stocks closed at 50,429.89, 418.3 points above yesterday's level at closing. The shares were valued at 0.84 percent on average.
The disappearing ambiguities, positive financial statements of the companies and recent inflation data caused the declining tendency to be transient and, despite the decline in major world markets, the İMKB managed to end the day with some profit, though small. The markets are now eyeing developments in Parliament.
Prime Minister Recep Tayyip Erdoğan was vested with the authority to establish the new government after his clear victory in the July 22 elections. Still some analysts are arguing that this issue will not have a deep impact on the markets. More attention will be paid to the developments in the financial markets abroad, they claim.
A Yatırım Deputy General Manager Murat Salar says it is still early to claim that the climate in the markets has changed. "There is no deterioration in the macro-economic data," he said.
Assistant Research Director of Kapital Investment Gülizar Özdemir believes it is still too early to open new positions and the investors have to wait a bit more to see how the major market agents will cope with the turbulence. "The Fed's decision on the interest rates will be waited," she says.
The main cause of the recent plunge around the globe, as well as in Turkish stocks, is the simmering concerns about sub-prime mortgage loans in the US. Investors, especially those in emerging markets, fear the same troubles may jump to their own countries. For Salar, the developments in the Turkish markets may also be perceived as a move to correct the recent sharp hikes. Immediately after the results of the July 22 elections indicated continued stability with the single-party government, markets leaped to all-time records of over 56,000 points. "The necessity for regulation arose. Therefore this wave of sales is not a surprise for us," he argued. Salar also claimed that there is nothing to worry about unless the İMKB-100 falls below 48,500 points or the lira rises above 1.35 to the dollar. For Salar the markets are also considering the inflation data released last Friday by the Turkish Statistics Institute (Turkstat). The figures marked that the consumer price index (CPI) had fallen to its lowest level in 37 years, a figure that couldn't even be imagined just five years ago.
The situation on Monday was also problematic in some major global markets. Financial stocks led to a sell-off of Hong Kong shares as investors, spooked by global market turmoil and concerns about the US credit market, cashed out after analysts and traders warned of more pain to come. Asia's second-largest stock market has shed nearly 7 percent of its value since marking a record high on July 26. In contrast, the Shanghai Stock Exchange (SSE) Composite Index posted an all-time high on Monday. Analysts say Shanghai's market, mostly walled off to foreign investors, shrugged off global market woes. Analysts say they expect share prices to rise as Chinese companies begin reporting first-half profits that are expected to have increased sharply in the midst of China's economic boom.
Stocks in the US rose in early trading Monday, partially rebounding from a sharp pullback Friday brought on by concerns about the credit market. Wall Street was looking for signs of encouragement after the fractious trading of the past two weeks. In a day devoid of economic news and with few earnings reports, investors are likely to remain cautious, especially with the Federal Reserve's meeting on interest rates scheduled for Tuesday. Policy makers are widely expected to hold the benchmark rate steady at 5.25 percent and, as usual, the greater concern is with the Fed's economic assessment statement.
Güncelleme Tarihi: 07 Ağustos 2007, 15:13