Turkey's equity market suffered a sharp decline on Wednesday, triggering a market-wide trading halt after a single asset management firm failed to meet investor redemption requests, intensifying concerns about potential broader liquidity pressures across the nation's investment fund industry.

The Istanbul Stock Exchange 100 Index tumbled 6%, prompting the exchange to activate its circuit breaker mechanism, which suspended all trading activity. Among the index's constituents, only two stocks managed to post gains while the remainder traded firmly in negative territory.

Destek Finans Faktoring AS emerged as the most significant drag on the benchmark's decline, with its shares plunging 10% during the session. Trading is scheduled to resume at 4:24 PM local time.

According to data from financial analytics platform Fintables, Turkish investors executed net redemptions totaling 55 billion lira ($1.13 billion) from domestic investment funds on Wednesday. The figures highlight notable outflows, with Tera Portfoy Yonetimi AS experiencing net withdrawals of approximately 32 billion lira, while funds managed by Pusula Portfoy Yonetimi AS saw redemptions reaching nearly 9.6 billion lira.

Attempts to reach Pusula for comment were unsuccessful, and Tera did not immediately respond to requests for comment.

The selloff follows an announcement on Tuesday from Pusula Portfoy stating that certain of its investment funds and money market funds were unable to satisfy investor redemption requests. In a separate statement, Tera Yatirim Menkul Degerler, which had previously agreed to acquire Pusula's portfolio management and securities operations, clarified that the transaction has not yet been finalized and therefore the company does not assume responsibility for redemptions pertaining to those funds.