Borsa Istanbul marks best January in 29 years

ISTANBUL

Following a lackluster 2025 in which the Turkish stock market delivered no real returns, investors have pinned high hopes on 2026 as a potential “year of recovery” for Borsa Istanbul.

The BIST 100 index delivered on that hope in January, posting record highs and securing its strongest January performance since 1997.

The rally began on Jan. 5, when the index hit 11,296 points following the release of December inflation data. Slowing price increases and growing expectations of continued interest rate cuts fueled momentum, pushing the benchmark steadily higher. By Jan. 23, broad-based buying lifted the index above 13,000 points, and it closed the month at a record 13,838.29. With a 23 percent monthly gain, the BIST 100 achieved its best January since 1997, when investors saw a 64 percent return.

Foreign investor interest played a key role in the surge. Overseas investors purchased $1.03 billion in equities and $3.5 billion in government debt securities during the month, excluding the final week. As of Jan. 23, foreign holdings in equities reached $39.9 billion, while government debt holdings climbed to $21.5 billion.

Another supportive factor was Türkiye’s five-year credit default swaps, which fell to 202.7 basis points in January, signaling improved confidence in lira-denominated assets. Combined with easing inflation and lower interest rates, conditions created a favorable backdrop for equities. Positive reports from international investment firms and Fitch Ratings’ decision to affirm Türkiye’s credit rating at “BB-” while revising its outlook from “stable” to “positive” further bolstered sentiment.

With these developments, the BIST 100 ranked second among major global indices in terms of returns since the start of the year, trailing only South Korea’s Kospi, which gained 24 percent. In dollar terms, the Turkish benchmark climbed to 320.38 points, its highest level since August 2024.

Trading activity was also robust, with an average daily turnover of 178.2 billion lira in January and a peak of 302.5 billion lira on January 29.