Concerns over the European debt crisis, coupled with the recent military tension in the Korean Peninsula, sent Turkish stocks down on Tuesday, while the Turkish Lira lost more ground against the U.S. dollar.
Istanbul Stock Exchange’s benchmark ISE-100 index closed Tuesday at 52,257 points, losing over 4.2 percent in one day. The U.S. dollar was trading at just above 1.6 liras at 5:40 p.m. Turkish time, having gained 1.1 percent against the Turkish currency.
The ISE-100 has shed 9.8 percent since May 13, while the U.S. dollar gained 4.8 percent against the lira in the same period. Two-year bond yields rose 6 basis points to 9.27 percent, according to an index by ABN Amro.
“Concerns over European debt, jitters between North and South Korea, as well as the year-lows seen in Asian markets are on the minds of investors,” Bloomberg quoted Batuhan Alpman, a trader at Şeker Yatırım in Istanbul, as saying in a note to clients. “As market participants are struggling to survive from Europe, we do not expect huge inflows into Turkish stocks”.
The stock decline also owed to a report by Credit Suisse, which said it expects a “further correction” in the equity market. The report downgraded Turkish banks Akbank, Yapı & Kredi and Halkbank to “underperform” from “neutral,” while İşbank and Garanti Bank were cut to “neutral” from “outperform”.
“The near-term risk-reward outlook indicates it is time to take profits, capitalize on the recent bounce and wait for a bigger correction to create better entry points,” analysts Akın Tüzün and Ateş Buldur wrote in the report. Link
