The BIST 100 index opened with a slight decline today, dropping 6.73 points, or 0.08%, to 8,939.40 points compared to the previous day’s close. Among sector indices, the communication sector led the gains, rising by 1.99%, while the food and beverage sector posted the largest loss, down by 0.81%.
Global Markets React to Fed’s Rate Cut
On the global front, markets are displaying a mixed performance following the U.S. Federal Reserve’s decision to cut the policy rate by 25 basis points yesterday, in line with expectations. This marks the second rate cut of the year, lowering the Fed’s benchmark rate to the 4.50-4.75% range.
In Turkey, investors are focused on the upcoming 4th Inflation Report presentation by the Governor of the Central Bank of the Republic of Turkey (TCMB), Fatih Karahan. The report is expected to provide valuable insights into the country’s economic outlook amid the ongoing global economic uncertainties.
Fed’s Statement Draws Attention
The Federal Reserve’s statement highlighted that recent indicators suggest that the U.S. economy continues to expand at a robust pace. However, it was noted that labor market conditions have generally softened since the beginning of the year, with the unemployment rate rising but remaining low.
While inflation is progressing towards the 2% target, it remains somewhat elevated. The Fed’s statement also mentioned that the risks to reaching both employment and inflation targets are roughly balanced.
Powell: “I Won’t Resign Even If Trump Asks”
Following the announcement, Fed Chairman Jerome Powell emphasized that the upcoming U.S. presidential election would not have an immediate impact on the Fed’s policy decisions. He also stated that even if elected President Donald Trump were to request his resignation, he would not step down.
As a result of the Fed’s interest rate decision and Powell’s statements, market expectations are now pricing in a 78% chance that the Fed will implement another 25 basis point rate cut at its final meeting of 2024.
Economic Agenda Today
In addition to the TCMB’s inflation report, analysts are also watching for data on the real returns of financial investment instruments. Globally, the Michigan Consumer Sentiment Index is also a key figure to track.
From a technical perspective, analysts note that the BIST 100 index has support at the 8,800 and 8,700 levels, while resistance is seen at the 9,000 and 9,100 points.
My Thoughts: The slight dip in Borsa İstanbul’s opening suggests some market caution, likely due to global developments and the awaited inflation report from the Central Bank. The Fed’s recent actions and Powell’s statements seem to have created mixed signals in the markets. It’s clear that while global economic conditions are showing signs of expansion, uncertainty remains, especially around inflation. As for the Turkish market, all eyes will be on how the TCMB addresses these concerns, and whether the 9,000-point mark for the BIST 100 can hold. It’s a crucial period for investors to stay informed and ready for potential volatility.
