Turkey's Borsa Istanbul goes down in opening session

By Tuba Sahin

ANKARA (AA) – The BIST 100 index lost 102.32 points to open at 76,892.95 points on Wednesday during its first transactions.

The benchmark index decreased by 0.13 percent while the banking and holding sector indexes declined by 0.14 and 0.24 percent, respectively.

On the third trading day of the week, the investment and trusts sector index increased the most, by 0.58 percent, while the leasing and factoring index saw the biggest drop -- a 1.22 percent fall.

The markets will focus on the U.S. Federal Reserve’s rate decision, which is expected to be announced after Turkish markets close; a rate increase of 25 base points is widely expected.

The local fixed income markets were relatively flat. The two-year benchmark bond was traded within a range of between 11.06 percent and 11.25 percent, ending at 11.15 percent, a 2 base points below Monday’s close.

Meanwhile, the U.S. dollar/Turkish lira exchange rate rose to 3.4880 at 10 a.m. (0700 GMT) on Wednesday.

On Tuesday, the lira’s value decreased by 0.6 percent against the greenback to close at 3.4887 per dollar.

Also on Tuesday, Deputy Prime Minister Mehmet Simsek said the government could take some steps to limit excessive risk taking in foreign currency by companies.

“We will need to start a macro-prudential framework for businesses in managing their currency risks, just as we did before for individuals in the country. We may need to bind several risk-taking tendencies to specific rules,” he said.

Foreign exchange shortfall in Turkish companies amounted to $213 billion as of September this year, nearly 25 percent of the country’s Gross Domestic Product. More than 15 percent depreciation in the lira against the dollar in 2016 means debt repayment is becoming more expensive for companies with local-currency earnings.