Turkish stocks were poised to enter a bear market, with banking shares proving the biggest drag on the benchmark index, as the lira continues to lose ground and political woes keep dominating headlines.
The Borsa Istanbul 100 Index fell as much as 1.7% on Wednesday, dropping more than 20% from a high reached in February. Eighty-seven members of the gauge declined, with lenders Turkiye Garanti Bankasi AS and Akbank T.A.S. contributing the most index points to the slump. The country’s currency retreated as much as 1% against the dollar.
Turkish shares have lost more than 20 percent since a high in February.
It’s been a bumpy ride for Turkish shares this year. The index entered bull territory in late February as traders welcomed greater stability in the currency after 2018’s slump, with the central bank working to regain credibility and geopolitical tensions fading.
But that optimism has almost completely dissipated as local elections returned political turmoil to the top of investors’ minds and the lira became the worst-performing emerging-market currency after Argentina’s peso. Additionally, a rout in assets from developing countries added to pessimism, just as tensions in the Gulf increased.
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