Predicting Borsa Istanbul Bank Indices Using Deep Neural Networks and Text Mining

This study investigates the forecasting of the XBANK banking index traded on Borsa Istanbul by integrating financial and textual data within a deep learning framework. Unlike the majority of existing studies that focus on stable market environments, this paper explicitly examines a period of heightened political uncertainty, namely the cancellation and re-run of the 2019 Istanbul local elections. This setting provides a unique opportunity to analyze how political events and news-driven information flows influence financial market dynamics. The empirical analysis is based on a comprehensive dataset that includes daily price indicators (opening, closing, high, and low values), technical indicators, selected macroeconomic variables, and Turkish-language news headlines. Textual data are processed using topic modeling techniques to extract latent information embedded in financial news, allowing for the incorporation of qualitative signals into the forecasting framework. From a methodological perspective, this study employs a feedforward deep neural network model designed to capture nonlinear relationships across heterogeneous and contemporaneous features. Feature selection is conducted using the Boruta algorithm, while hyperparameters are optimized via grid search. The model structure reflects a deliberate design choice aimed at capturing short-term, news-driven shocks and cross-feature interactions, which are particularly relevant during periods of political uncertainty. The results indicate that incorporating textual information significantly improves forecasting performance and that news topics related to political decisions, central bank policies, and geopolitical developments have a measurable impact on the XBANK index. Furthermore, the findings suggest that the political uncertainty surrounding the 2019 local elections led to increased market sensitivity and volatility, highlighting the role of information shocks in emerging financial markets. Overall, this study contributes to the literature by combining financial and textual data in an emerging market context, utilizing Turkish-language news sources, and providing empirical evidence on the impact of political uncertainty on the BIST bank index.

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Publication Details

Journal
Applied Sciences
Published
2026-04-30
DOI
https://doi.org/10.3390/app16094377
Primary Topic
Stock Market Forecasting Methods
Type
article
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article

Predicting Borsa Istanbul Bank Indices Using Deep Neural Networks and Text Mining

Elvan HAYAT, Cansu Altunbas, Olgun Aydın
Applied Sciences
Stock Market Forecasting Methods
article

Predicting Borsa Istanbul Bank Indices Using Deep Neural Networks and Text Mining

Elvan HAYAT, Cansu Altunbas, Olgun Aydın
article en

Abstract

This study investigates the forecasting of the XBANK banking index traded on Borsa Istanbul by integrating financial and textual data within a deep learning framework. Unlike the majority of existing studies that focus on stable market environments, this paper explicitly examines a period of heightened political uncertainty, namely the cancellation and re-run of the 2019 Istanbul local elections. This setting provides a unique opportunity to analyze how political events and news-driven information flows influence financial market dynamics. The empirical analysis is based on a comprehensive dataset that includes daily price indicators (opening, closing, high, and low values), technical indicators, selected macroeconomic variables, and Turkish-language news headlines. Textual data are processed using topic modeling techniques to extract latent information embedded in financial news, allowing for the incorporation of qualitative signals into the forecasting framework. From a methodological perspective, this study employs a feedforward deep neural network model designed to capture nonlinear relationships across heterogeneous and contemporaneous features. Feature selection is conducted using the Boruta algorithm, while hyperparameters are optimized via grid search. The model structure reflects a deliberate design choice aimed at capturing short-term, news-driven shocks and cross-feature interactions, which are particularly relevant during periods of political uncertainty. The results indicate that incorporating textual information significantly improves forecasting performance and that news topics related to political decisions, central bank policies, and geopolitical developments have a measurable impact on the XBANK index. Furthermore, the findings suggest that the political uncertainty surrounding the 2019 local elections led to increased market sensitivity and volatility, highlighting the role of information shocks in emerging financial markets. Overall, this study contributes to the literature by combining financial and textual data in an emerging market context, utilizing Turkish-language news sources, and providing empirical evidence on the impact of political uncertainty on the BIST bank index.

Applied SciencesVol. 16(9)
Gdańsk University of Technology (PL), University of Gdańsk (PL), Adnan Menderes University (TR)
Openalex Percentile: Top 6%
Stock Market Forecasting Methods
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