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Turkish market & political fears

Reuters reports that Turkish shares are down sharply on worries over the country's political future.

A standoff between supporters of Islamic and secular government has sent shares reeling; at one point in the day's trading, the Turkish market was down close to 8 percent. Reuters has more:

Istanbul's main index (.XU100: Quote, Profile, Research was down 6 percent and Turkish sovereign bonds sold off after a court challenge to the presidential election process and a mass demonstration against the ruling party.

Fears of army intervention, prompted by a warning to the Islamist-rooted AK Party government that it would protect the secular state, added to the concerns.

Meanwhile, Bloomberg reports that the latest drops in the share market and the Turkish lira come at a time when the market was enjoying a bit of a rebound over last year's poor performance.

The lira's drop today pares a gain of 5.4 percent since the start of the year and the benchmark National 100 Index of the biggest stocks was up 20 percent on the year before its slump today. Turkiye Is Bankasi AS, the nation's biggest bank, dropped 45 kurus, or 6.4 percent, to 6.55 liras, and Koc Holding AS, the biggest Turkish company, fell 35 kurus, or 5 percent, to 6.75 liras.

Turkey's economic growth has averaged 7 percent a year since 2002, compared with 1.6 percent in the countries sharing the euro. The country attracted a record $19.8 billion in foreign investment last year, twice the previous year's figure and another $11 billion in the first quarter of this year. Its benchmark stock index, which reached a record April 25, has been the world's 11th best performer this year among 90 global indexes tracked by Bloomberg.


Investor Mark Mobius remained positive about the outlook for Turkey and its share market when he spoke to Bloomberg News last week.

Despite the current political turmoil and last year's poor stock market performance, Mobius said that he is heavily invested in Turkey and sees its stock market as an area of attractive value relative to other global markets.

More info on Turkey's political situation at Bloomberg and MSNBC.

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