Turkey: Market Taking Damage

Thursday, June 06 2013 @ 07:37 PM UTC

There seems to be no end in sight for the ongoing protests in key cities of Turkey. The latest sector to be hit by the growing unrest is the country’s market. Investors now doubt Turkey’s market as the possibility of the protests gripping the nation to continue indefinitely emerges.

The benchmark stock index of the country nosedived by more than 15 percent on May 22.

Frenzied selling was seen this week after PM Recep Tayyip Erdogan announced that he would push through the redevelopment plans for the Gezi Park in Istanbul. A plunge of more than 8 percent in
Thursday was reported for the Istanbul Stock Exchange National 100 Index.

The peaceful protest against the redevelopment of the beloved park quickly worsened to what is now being reported as an anti-government rally against Mr Erdogan and his party.

Analysts are now saying that “there are now no buyers” in the country’s market.

The Turkish lira weakened against the euro and the U.S. dollar after the yields on the country’s 10-year government bonds rose to as much as 8 percent on Thursday.

Many are now calling for the resignation of Mr Erdogan, further accusing his government of authoritarianism and forceful imposition of conservative Islamic values.

Turkey’s finance minister, however, is singing another tune as he asserts that the country “is doing just fine.”

The country’s economic activity prospered in Mr Erdogan’s rule but the success it gained in the past years are now being quickly substituted with dampened market performance as unrest rages on.

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