Turkish stocks tumbled on Wednesday as an asset manager's failure to meet redemption requests fueled concern about broader liquidity stress in the country's fund industry. The Borsa Istanbul 100 Index fell as much as 5.7%, extending its two-day decline to 6.9% and putting it on course for the biggest such drop since March 2025. Destek Finans Faktoring AS contributed most to the losses with a drop of 10%. The index later trimmed losses and was trading 4.3% lower as of 13:25 a.m. in Istanbul.

Investors withdrew a net 55 billion liras ($1.13 billion) from Turkish investment funds on Wednesday, according to financial data platform Fintables. Tera Portfoy Yonetimi AS saw about 32 billion liras of net outflows, while nearly 9.6 billion liras was withdrawn from Pusula Portfoy Yonetimi AS funds. The selloff comes after Pusula Portfoy announced Tuesday that some of its investment and money market funds were unable to meet redemption requests. Tera Yatirim Menkul Degerler, which had agreed to acquire Pusula's portfolio management and securities businesses, said the transaction hasn't yet been completed and it is not responsible for redemption processes.

Economist Banu Kivci Tokali of BVeri Consulting said growing concerns regarding fund collateral soundness have heightened risks for other funds. Alper Akalin of Akalin Finance noted defaults led to unease and increased withdrawal demands, forcing asset managers to sell liquid index-member stocks. He added these are repercussions of new guidelines introduced by Turkey's capital-markets regulator at the end of August.