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| Version 2 | Version 3 |
|---|---|
| Turkish stocks and currency slump | Turkish stocks and currency slump |
| (40 minutes later) | |
| Turkey's main stock index and its currency, the lira, have tumbled amid fears that the army will block the government's pick for president. | Turkey's main stock index and its currency, the lira, have tumbled amid fears that the army will block the government's pick for president. |
| The main ISE National 100 index lost 8% of its value upon opening and the lira dropped as much as 4% in early trading. | The main ISE National 100 index lost 8% of its value upon opening and the lira dropped as much as 4% in early trading. |
| Hundreds of thousands of people rallied in Istanbul over the weekend to protest against the candidacy of Abdullah Gul. | Hundreds of thousands of people rallied in Istanbul over the weekend to protest against the candidacy of Abdullah Gul. |
| Protesters in support of secularism in Turkey are concerned that Mr Gul has remained loyal to his Islamic roots. | Protesters in support of secularism in Turkey are concerned that Mr Gul has remained loyal to his Islamic roots. |
| Mr Gul failed to win election in a first round parliamentary vote, though he has said he will stand in the second round of voting on 2 May. | Mr Gul failed to win election in a first round parliamentary vote, though he has said he will stand in the second round of voting on 2 May. |
| On Friday, the army accused the government of tolerating radical Islam and vowed to defend secularism. | On Friday, the army accused the government of tolerating radical Islam and vowed to defend secularism. |
| Higher risk | Higher risk |
| Turkey's army has toppled three governments since 1960, and analysts said there were fears that it could intervene again. | Turkey's army has toppled three governments since 1960, and analysts said there were fears that it could intervene again. |
| The threat of army intervention in Turkey's politics has unnerved the country's financial markets, which last week had reached historic highs supported by an appetite for emerging market assets and the prospect of Turkey's accession to the European Union. | The threat of army intervention in Turkey's politics has unnerved the country's financial markets, which last week had reached historic highs supported by an appetite for emerging market assets and the prospect of Turkey's accession to the European Union. |
| We would expect a sharp downward market correction... as investors recognise that political risks have notched up significantly Timothy Ash, Bear Stearns economist | We would expect a sharp downward market correction... as investors recognise that political risks have notched up significantly Timothy Ash, Bear Stearns economist |
| The ISE National 100, Turkey main share index, fell 3745.18 points, or 8%, to 43,116.13. | The ISE National 100, Turkey main share index, fell 3745.18 points, or 8%, to 43,116.13. |
| The lira also headed south to 1.3882 against the US dollar after trading at 1.32 on Friday - its strongest level for nearly a year. | The lira also headed south to 1.3882 against the US dollar after trading at 1.32 on Friday - its strongest level for nearly a year. |
| "We would expect a sharp downward market correction... as investors recognise that political risks have notched up significantly," said Bear Stearns economist Timothy Ash. | "We would expect a sharp downward market correction... as investors recognise that political risks have notched up significantly," said Bear Stearns economist Timothy Ash. |
| The staunchly secularist opposition party boycotted the first-round presidential vote because it was not consulted on Mr Gul's selection as the candidate for the Justice and Development (AK) Party. | The staunchly secularist opposition party boycotted the first-round presidential vote because it was not consulted on Mr Gul's selection as the candidate for the Justice and Development (AK) Party. |
| They have asked the country's constitutional court to invalidate the vote on the basis that not enough lawmakers were present. | They have asked the country's constitutional court to invalidate the vote on the basis that not enough lawmakers were present. |
| The court is expected to deliver a verdict by Wednesday, when the second round of voting is due to take place. | The court is expected to deliver a verdict by Wednesday, when the second round of voting is due to take place. |
| Market support | |
| Analysts expect market volatility to continue while political uncertainty prevails. | |
| But they are generally confident that a sharp sell-off akin to that seen last May, when the markets were hit by global inflation fears, is not on the cards. | |
| Turkey's economy has been recovering from financial turmoil in 2001, and a number of reforms since then have helped to sustain growth. | |
| The current government has also managed to keep its finances in check as part of its plans to cut national debt levels and meet the economic requirements of the International Monetary Fund and those needed to join the European Union. | |
| Turkey's Deputy Prime Minister Abdullatif Sener said the government was following the current market reaction, adding that there was foreign and domestic confidence in the state of the economy. |