Turkey's main stock index enters bear market, posts worst month since 2008

Turkey's main share index entered a bear ​market and posted its worst monthly ​performance since 2008 in September after ‌a selloff ​triggered by cash-strapped investment funds spread across the broader market.

The index closed down 2.79% on Wednesday, more than 20% below its May ‌11 record close, confirming a bear market. It ended September down 16.65%. The selloff accelerated on September 14 on concerns over funds heavily exposed to thinly traded stocks. Analysts said some funds were forced to ‌sell liquid holdings to meet redemption requests, driving broader declines and triggering further withdrawals.

The index fell ‌more than 8% in the week ended September 18, its worst weekly performance since March 2025, when the jailing of Istanbul Mayor Ekrem Imamoglu triggered a sharp selloff. The Capital Markets Board (SPK) on September 17 ordered the liquidation of ⁠131 funds ​managing more than $20 billion ⁠and serving 455,758 retail investors.

Regulators have since widened their investigation into alleged market manipulation in stocks and fund markets. Justice Minister ⁠Akin Gurlek said on Wednesday that the number of suspects had risen to 217, with 56 jailed ​pending trial. SMALLER STOCKS HIT HARDEST

Istanbul's index of companies outside the top 100, which has 484 ⁠constituents, had outperformed the benchmark since the start of 2025. The gap, however, has narrowed sharply after the SPK in ⁠late ​August restricted how much of a fund's assets can be concentrated in individual companies. The index fell roughly 35% in September, its worst monthly performance in lira terms since its launch ⁠in 2009.

The blue-chip top 30 index fell less to close September down 9.8%. By contrast, the index, ⁠which includes the remaining 70 ⁠stocks in the top 100, has borne the brunt of the selloff since January 2025, with 15 constituents losing between 50% and 90% of ‌their value ‌in September, according to LSEG-compiled data.