Tensions in the Middle East impact the stock market: Only the dollar gained

The rising geopolitical tension in the Middle East, following Iran's attacks on Israel, has caused sharp declines on Borsa Istanbul.

Under pressure from high interest rates and risk aversion, the BIST 100 index experienced a significant decline, losing 6.83 percent over the week.

Borsa İstanbul closed the week with a significant loss, despite efforts to recover on the final trading day.

The rising tension in the Middle East following Iran's retaliatory attack on Israel has pushed the BIST 100 index below critical levels, while Israel's TASE stock exchange, which was open for the first two days of the week, also closed with a 2.96 percent loss.

However, despite the Israeli stock market falling by 3 percent, Borsa İstanbul became the most affected market in the region.

The decline in the stock market was not limited to geopolitical risks alone. High interest rates, the failure to break inflation expectations, the persistence of high loan interest rates, and the slowdown in the economy have also increased the pressure on the stock market.

Investors shifting toward safer havens such as deposits and gold in the short term has negatively impacted stock prices.

Other stock exchanges in the Middle East were also negatively affected by geopolitical risks, but Borsa İstanbul experienced one of the largest losses.

Saudi Arabia's Tadawul Stock Exchange (TASI) closed the week with a 2.56 percent loss, while the Dubai General Index (DFMGI) fell by 2.55 percent.

While the Amman Stock Exchange in Jordan closed the week with a 0.44 percent loss, the Qatar Stock Exchange (QSI) fell by 1.13 percent.

In contrast, Iraq's main index, the ISX, gained 2.3 percent, becoming the best-performing stock market in the region. Meanwhile, Egypt's EGX 30 index closed the week with a 0.83 percent gain.

This week, among investment instruments, only the dollar provided gains for investors.

The dollar rose by 0.28 percent last week to 34.2530 liras, while the euro fell by 1.58 percent to 37.6180 liras. The gram price of gold decreased by 0.14 percent to 2,919 liras.