Turkish stocks fall 2.5% after Friday’s failed coup

Posted on July 18, 2016

Turkish stocks have dropped this morning, with the Istanbul 100 Index sliding 2.5 per cent at the start of trading this morning following the failed coup attempt on Friday night.

This ends a strong rally for Turkish stocks, which had climbed more than 10 per cent in the last two weeks amid a broad post-Brexit vote bounce for emerging markets.

When the attempted coup was launched on Friday, the Istanbul stock market had already closed, although exchange trading funds tracking Turkish stocks, which are traded on US exchanges, took a heavy hit.

The iShares MSCFI Turkey ETF fell as much as 4.1 per cent, and closed down 2.5 per cent, before extending its losses in after hour trading.

Although the Turkish lira has rebounded this morning, halving Friday’s 5 per cent losses against the dollar, this morning Rabobank’s Piotr Matys said:

Essentially, we expect Turkish assets to be vulnerable in the short-term. The worst case scenario has been avoided as a successful coup would have triggered a full-scale sell-off. The damage, however, has been done. Turkish bonds and stocks face a turbulent period due to heightened political risk.

Chart courtesy of Bloomberg

You must be logged in to post a comment Login