Although the BIST 100 index of the Borsa Istanbul stock exchange had dropped below the $25,000 level - deemed as the lowest long-term support level by analysts - according to data compiled from the Central Bank of the Republic of Turkey (CBRT) and the Borsa Istanbul, the BIST 100 index has recovered over the past four weeks due to foreign purchases.
According to the data, which does not include market prices and foreign exchange rates, investors residing abroad made a net purchase of $1.76 billion between Feb. 15 and March 11. When the government securities (GDDS) are included, the net purchases of foreigners were around $1.875 billion, which raised the BIST 100 index 4.15 percent to 27.668 as of March 11.
Speaking to Anadolu Agency (AA), the research manager of Gedik Investments, Üzeyir Doğan, said the market-friendly discourse of important central banks has increased risk-taking attempts. While countries including Turkey, Russia and Brazil faced fast declines in the value of their national currencies, the foreign funds entering these countries - as they become cheap - have caused the exchange rates to decrease and the value of stocks to increase. "These two effects caused the BIST 100's dollar-based index to increase 25 percent, meaning the rates are back to the level they were before the crisis with Russia emerged," Doğan said.
Also, last week, following the United States Federal Reserve's (Fed) decision regarding interest rates, the dollar hit 2.8435 against the Turkish lira, the lowest level in the past four months. The appetite for taking risks in the monetary markets has increased due to the fact that the Fed has not amended the interest rates, decreased the expected increase in the interest rates from 4 percent to 2 percent and made dovish statements. The currencies of developing countries have also raised their value against the dollar. According to analysts, the technical levels in the dollar indicate that the optimistic prices in lira will continue, and as long as the dollar-lira exchange rate stays under 2.86, downward movement will continue. On March 18, when the operations on the Borsa Istanbul closed, the exchange rate was fluctuating around TL 2.6600 per dollar.
