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Türkiye’s main stock index, the BIST 100, closed the week with a 3.60% loss, settling at 9,019 points after briefly dipping below the 9,000 threshold for the first time since March 24.
During the final session of the week on Friday, the BIST 100 dropped by 1.65%, hitting a low of 8,985.52. The decline reflects growing investor concerns over persistent inflation, compounded by weakening corporate earnings and rising risk premiums.
The total market value of the BIST 100 was around 8.17 trillion Turkish liras ($209.4 billion), with a daily trading volume of 86.2 billion Turkish liras ($2.19 billion). During the day, 72 stocks on the index dropped and 27 rose compared to the previous close.
Analysts attribute the sell-off to a combination of high interest rates, lackluster earnings reports, and the recent uptick in Türkiye’s 5-year credit default swap (CDS) premium, which climbed from 290 basis points in mid-May to 318.
In macroeconomic developments, the Turkish Statistical Institute (TurkStat) reported that Türkiye’s economy expanded by 2% year-on-year in the first quarter of 2025. On a quarterly basis, GDP rose by 1%, falling slightly short of market expectations. Household consumption was the main driver of growth, contributing a 2% increase, while agriculture and industrial output contracted.
Meanwhile, the unemployment rate rose to 8.6% in April, up 0.6 percentage points from the previous month. Broader labor underutilization, known as the “labor force underutilization rate,” surged by 3.4 points to 32.2%, reflecting ongoing fragilities in the labor market.
Developments in the United States continued to shape international markets, as the Federal Reserve’s closely watched inflation metric, the Core Personal Consumption Expenditures (PCE) Index, increased by 0.1% on a monthly basis and 2.5% year-on-year in April, aligning with market expectations. Federal Reserve officials, including Dallas Fed President Lorie Logan and San Francisco Fed President Mary Daly, emphasized the need to maintain current interest rate levels for an extended period to ensure inflation returns to target.
Meanwhile, tensions escalated once again in U.S.-China trade negotiations as President Donald Trump accused China of breaching bilateral trade agreements, although he did not offer specific details to support the claim.
In a parallel statement, U.S. Treasury Secretary Scott Bessent acknowledged that the talks had reached an impasse and noted that direct intervention by both countries' leaders might be required to revive the stalled negotiations.
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