BIST 100 index has been on an upward trend for over six months, hits 100,000 points earlier on Tuesday
Borsa Istanbul’s BIST 100 index opened Tuesday at 99,742.14 points with a 300.03-point increase from 99,442.11 points at Monday's close, which was the highest close of all times.
After profit-takings, the benchmark index closed Tuesday at 99,299.67 points -- down 0.14 percent -- with a total trading volume of 5.1 billion Turkish liras (approximately $1.45 billion).
Analysts said that the historic record was heavily related with an economic growth data. The Turkish Statistical Institute had announced Monday the country's economy grew by 5 percent in the first quarter of this year, compared to same period in 2016.
BIST 100 index was at 71,792.96 points on December 2, 2016, since then it has been on an upward trend and advanced nearly 40 percent.
Commenting on recent trend of Turkey's Borsa Istanbul, Ozlem Bayraktar Goksen, chief economist at Tacirler Investment, reminded that BIST 100 index was at 68,567.89 points on January 21, 2016.
"Turkey's stock exchange market witnessed a serious sale movement during the beginning of last year. Therefore price of Turkish assets became quite cheaper compared to prices in other emerging markets.
"There has also been an enormous global risk appetite specially for emerging markets' assets in the last six months.
"In addition, Turkish Central Bank's decisive actions to prevent foreign exchange rate volatility and to protect price stability reinforced the credibility of domestic markets," she said.
Positive impact on markets
The U.S. dollar/Turkish lira exchange rate hovered at around 3.52 at 6 p.m. local time (1500GMT) on Tuesday. A dollar was traded for 3.94 liras in mid-January this year.
"Finally, result of the April 16 referendum also has a positive impact on markets. The purchases increased along with the elimination of political uncertainty," she added.
Turkish voters went to the polls on April 16 to decide whether to approve changes to the country’s constitution, which also includes shift from parliamentarian system to a presidential one, and the Yes campaign won with 51.41 percent.
Enver Erkan, analyst at KapitalFX, echoed that Turkish stocks have been trading at discounted levels compared to emerging market equity indices, already moved upwards by 28 percent since the beginning of this year.
"There are $2.1 billion amounted inflows to stocks from foreign investors. BIST 100 index has been in a rally, after slipped to 70,000 level in July," he said while referring to July 15 failed coup attempt last year.
"Index had priced the worst scenario in that time period," he added.
Erkan noted that continuing long-term growth expectations and their value in the economy, market mover companies’ equities also offered purchasing opportunity from cheaper levels.
"Turkish Central Bank is more confident than before. Tight monetary policy stance and increasing funding costs had a positive impact on the market confidence," he said.
"After the voting on April 16, investors see that Turkey is now free from elections till 2019, that brought more positive trends to the markets."