Stocks in Istanbul dip by 2% following the dismissal of CHP's Istanbul leader

The Borsa Istanbul (BIST) 100 index took a steep dive during Wednesday trading, with a 2.4% drop that sent shockwaves through the Turkish stock market. The sell-off was triggered by the annulment of the 38th Istanbul Congress of the main opposition party, the Republican People's Party (CHP).

Before the sell-off, the index had been on an upward trajectory since the start of June, thanks to a rally in banking and financial indices. However, the tide turned on Tuesday, with the BIST 100 index reaching its lowest level since July during the final hours of the session, at 10,616.64 points.

The losses exceeded 5.8%, nearing the 6% circuit-breaker threshold. Only 11 indices closed with gains during the session, while a total of 88 indices lost value. The banking index recorded the sharpest decline, falling more than 6%. Financial indices also saw a 3% drop, while services and industrials declined by 1%.

The party chairman who was removed by a court ruling on Monday is Özgür Özel, the current leader of the CHP in Istanbul. His ousting triggered turmoil and affected stock market sales. He was replaced by Gürsel Tekin following allegations of irregularities in the internal party congress.

The total transaction volume for the day was ₺208.7 billion ($5.07 billion). Despite the dip, the overall market value of the index stood at ₺10.1 trillion ($246.2 billion).

Interestingly, the BIST 100 reached a new all-time high in August, thanks to strong foreign inflows of more than $1.5 billion. The uptick rule on short-selling was applied to equities eligible for short-selling due to the 2% drop in the BIST 100 index.

As of 11:05 a.m. local time (GMT+3), the index stood at 10,614.64 points. The sell-off marks a stark contrast to the market's performance in recent months, and investors will be closely watching how the market reacts in the coming days.