Banks Rally on BIST Following Inflation Report
Following the inflation report announced by the Central Bank of the Republic of Turkey (CBRT), the banking sector saw an acceleration in gains. In a presentation attended by CBRT Governor Fatih Karahan and his deputies, it was emphasized that the tight monetary policy would continue until price stability is achieved. Following these statements, the banking index rose by 6% during the day, reaching 12,392 points. The BIST 100 index also received support from the rise in bank shares, increasing by 2.15% to 9,157 points as of the last hour, indicating a continuation of the upward trend.
Today, the stocks that saw the most significant increases in the banking index included YKBNK, ALBRK, AKBNK, and ISCTR. With the exception of ALBRK, the most rising bank shares also attracted attention as the stocks with the highest trading volume on the BIST today. Market analysts stated that the messages given after the inflation report increased expectations for interest rate cuts in December. With the impact of these positive expectations, stock purchases in the banking sector accelerated. Investors anticipate that yields will rise as a result of the inflation report and respond positively to future monetary policy moves.
Update on inflation expectations: Moreover, the report revealed that the CBRT raised its inflation expectations. The expectation for the end of 2024 was increased from 38% to 44%, while for December it was reduced from 4 points to 2 points. The expected inflation for the end of 2025 was also raised from 14% to 21%, revised due to the impact of food prices exceeding this year's target. Governor Fatih Karahan noted that high food prices and import prices in TL were factors that pushed up the forecasts.
The report also stated that factors such as the output gap and demand conditions are determinants of inflation forecasts. It was mentioned that the increase in the 2025 inflation forecast was contributed by these conditions, as well as assumptions regarding managed prices. In this context, it was emphasized that updates in the main trend of inflation would also be taken into account.