The effect of selected macroeconomic variables on BIST 100 index

In capital markets, the stock market is the market where investors engage in the most investment activities. This study examines the relationship between Turkey's economic variables, such as the exchange rate, interest rates, industrial production index, inflation rate, and the Borsa Istanbul index. Due to the differences in the stationarity levels of the variables, the long-term relationship between the variables is analyzed using the ARDL model. The study used monthly data from the period of January 2010 to October 2023. According to the findings, while the exchange rate and industrial production index variables positively affect the BIST-100 index, the interest rate has a negative effect at a 10% significance level. In other words, a one-unit increase in the exchange rate variable increases the BIST-100 index by 0.048, while a one-unit increase in the industrial production index variable increases the BIST-100 index by 0.917. This indicates a positive and statistically significant relationship between the BIST-100 index and the exchange rate and industrial production index variables.