Turkish stocks plunge 8.31 pct; worst fall in ’06

ISTANBUL (AFP) – Turkish shares tumbled by 8.31 percent yesterday to reach their lowest level this year as investors fled amid continuing losses in global markets and political and economic concerns at home, analysts said. The national index of the Istanbul stock exchange, the IMKB100, lost 3,292.6 points to close at 36,351 points, compared to 39,643.6 on Thursday. Analysts said the fall was triggered by investors reducing their exposure to risky emerging markets amid concern about the impact of possible increases in interest rates in the United States. «This move follows a global movement on the equity market. This is a global issue of risk evasion which sharply hits risky markets,» Haluk Burmumcekci, research director at Disbank, told AFP. Stock markets in Asia also fell sharply yesterday, followed later in the day by European and US equities. Burmumcekci added that investors in Turkey were also wary of higher-than-expected inflation figures last month. Consumer prices in Turkey rose by 1.34 percent in April from March and by 8.83 percent on a year-on-year basis, shooting sharply above expectations and raising fears about the government’s year-end target of 5.0 percent. Arzu Odabasi, an analyst at Global Securities, cited political tensions at home after an unprecedented attack last week in which a lawyer burst into Turkey’s highest administrative court killing a senior judge and wounding four others. The attack, apparently triggered by rulings upholding a ban on the Islamic headscarf in public institutions, provoked mass street protests by secularists who accused the Islamist-rooted government of creating an atmosphere in which such incidents could take place. «There is continuing pressure to sell on international markets, but the reason why it is stronger in Turkey is political instability,» Odabasi told the Anatolia news agency. Turkey is staging a spectacular recovery from two major crises in 2001 and 1999 that brought the country to the brink of financial collapse and led to it asking for aid from the International Monetary Fund (IMF). Turkey is currently implementing a three-year standby program backed by a $10 billion (7.79-billion-euro) IMF loan, which replaced an earlier $16 billion deal.