Russia crisis hits Turkish stocks
ISTANBULTurkey’s stocks fell 4.39 percent and its debt insurance costs rose on Nov. 24 after it reportedly shot down a Russian fighter jet near the Syrian border, while other emerging assets also struggled in the face of a strong dollar and weak commodities.
Turkey’s main stock exchange, the BIST 100, closed the day at 76.242,98 points, which neared the low levels of October ahead of the Nov. 1 elections, although the general declining trend rebounded a bit as the markets reacted to the appointment of former Finance Minister Mehmet Şimşek as the new economy tsar in the newly announced cabinet, according to analysts.
Turkey’s five-year debt insurance costs also rose to their highest level since mid-November, according to Markit data, and Eurobond prices fell across the curve. The Turkish Lira also lost 0.6 percent against the dollar.
Turkey reportedly shot down a Russian warplane near the Syrian border on Nov. 24, saying it had repeatedly violated its air space. However, Russian President Vladimir Putin denied the claim and warned of “serious consequences” for what he termed a “stab in the back.”
The dramatic plunge in Turkey’s main stock exchange was mainly related to the Russia crisis, said Integral Securities Research Director Tuncay Turşucu.
“We hit the ‘Black Swan.’ This term is used to refer to really unexpected incidents. As market players, we have seen the Russian crisis like this,” he said, as quoted by Reuters.
He also noted the non-presence of Ali Babacan in the new cabinet affected the currency rate, as the markets have a positive stance on Şimşek and are also happy seeing the establishment of a cabinet after a relatively long time.
Russia’s main stock exchange also declined around 3.5 percent on Nov. 24 amid the escalating tension between the two countries.