Activity increased across all asset classes globally. The ounce of gold fell 0.36% in the first half of the year. While there have been decreases of up to 30 percent in US equity markets, decreases in equity markets in Europe have reached 20 percent. In Turkey, while inflation was 35.64% in the first five months, the gold gram gained 25.13% and the dollar / TL by 28.45% in the first half of the year. The increase in the BIST 100 index was 29.48%. The increase in the value of the properties was 54.85%.
The process we are in requires that the current currency be protected from inflation. It is noted that investors mainly act in this direction. According to the column of Zeynep Aktaş; While the real estate sector stands out among the investment vehicles in Turkey, equities and Eurobonds will be followed by investors in the coming period. Currency and currency instruments should be expected to hold their course alongside inflation.
Looking at the stock market, the decline in stocks, which have the power to support the growth trend, will offer investors a buying opportunity. Investors will continue to follow stocks with strong dividend yields over the long term.
Investing in shares is a long-term investment. Even though there are large fluctuations, growing companies with strong long-term investments bring money to investors. Negative developments, day-to-day worries can negatively affect stock prices and lead to withdrawals. However, investments in good stocks pay off in the long run.
Why is stock market volatility high?
1- The inflow of money is limited.
2- As inflation rises, recession concerns have increased.
3- There is a foreign exit from the market. Foreign share in the stock market is decreasing. The share of foreigners, which was 35.18 per cent at the beginning of June, fell to 33.63 per cent. The foreign share fell to 33.49 per cent on June 27.
4- Markets are attracted to safe margins with robotic orders against a possible decline.
5- Inflationary concerns are high. The pursuit of alternative yields causes money to be parked in certain instruments.
The worst start of half a century in the world stock markets
With the pandemic, the record run of cheap money around the world has come to an end and all stock markets have adapted to it. This was the worst start for the stock market of the last 50 years on a global scale. In the middle of the year, the high-tech Nasdaq was down 29.5% and the broad-spectrum S&P 500 was down 20.5%. Both indices are in bear market territory. It appears that concerns that the Fed will drag the US economy into recession have been met by the markets.
The reason for the falls
Although the stock market rally in the first half of the year was mainly due to rising interest rates and inflation, many geopolitical risks have come together. Covid-19 continues to wreak havoc and blockade in China. Global supply chains are clogged and the Russian invasion of Ukraine continues.
Historically, as interest rates rise and borrowing costs rise, investors withdraw money from riskier parts of the economy. High-growth companies and technology stocks were the first to discount the decline. A similar situation exists in exchange rates. The only bright area in equities was energy. The Russian invasion of Ukraine caused oil and natural gas prices to rise. Petrol and diesel prices set new records. This rise in commodity prices has benefited the global energy giants. Many have made record profits.
The price of the stock market, dollar and gold
The Istanbul Stock Exchange BIST 100 Index is at the level of 2,443. The index is below the averages of 8.20 and 50 days. The 100-day average is 2,332. In the short term, the break of the averages in the 2,400-2,500 range could strengthen the index. Uncertainty about the companies that could be affected after the BRSA decision had a negative impact on prices. However, it is good that the weekly close is above the 100-day average.
The USD / TL rate is at the 16.74 level. Although the BRSA decisions have an impact on the exchange rate, the decline in the exchange rate is due not only to developments on a local basis, but also to the appreciation of the dollar on a global basis. Here because