Turkey’s Lira, Stocks Decouple as Orthodoxy Proves Double-Edged

Turkey’s currency and stocks have decoupled from each other by the most in a quarter century as local and foreign investors respond differently to the nation’s return to orthodox policies.

The lira sank to record lows after the central bank’s first interest-rate hike in two years trailed expectations and authorities paused their defense of the currency. Meanwhile, stocks have scaled new highs with inflation near 40% pushing citizens to use them as a store of value. The contrasting moves have turned a historical positive correlation between the two assets to the most negative since 1999.