Turkish stocks drop more than 3% after MSCI freezes certain index changes
EWG•Turkey’s benchmark BIST 100 fell 3.36% after MSCI froze certain changes to its Turkey equity indexes, citing concerns about market reforms and coordinated trading. MSCI said it could consult on downgrading Turkey from emerging-market status if sufficient progress is not evident by June 2027.
1. Stocks extend losses
The BIST 100 fell 3.36% by 0930 GMT on Friday, extending an early decline of 1.4%. It was on track for a fifth consecutive weekly loss and remained more than 20% below its May record closing high. The banking index fell 2.06%.
2. MSCI freezes changes
The freeze took effect immediately and will remain in place until further notice. MSCI will not increase foreign inclusion factors or the number of shares used in its indexes, add securities to the MSCI Turkey Investable Market Index, or make upward migrations across size segments.
3. Reform concerns
MSCI said concerns raised in its 2026 Market Classification Review included possible coordinated trading through fund holdings affiliated with smaller listed companies, which could undermine free-float estimates and market integrity. It said credible enforcement and disclosure standards enabling independent verification were needed; if sufficient progress is not evident by June 2027, it could consult on downgrading Turkey to frontier- or standalone-market status.
