ECONOMY

Turkish markets strengthen on hopes of stability

ISTANBUL (Reuters) – Turkish financial markets closed mixed yesterday in steady trade as stocks fell, while the lira made a strong advance with investors digesting a call for early elections, hopeful the political environment will stabilize. Turkey’s lira gained nearly 1 percent since its close on Friday to end the day at 1.3390 against the dollar on the interbank market. The currency lost nearly 4 percent throughout last week as investors trimmed positions amid escalating political tensions. Turkey has called early elections on July 22 to resolve a standoff between the ruling Justice and Development Party (AKP) and its pro-secular critics, including the powerful army. Markets were sent into a tailspin after the military warned Turkey’s Islamist-rooted government it was watching the election with «great concern.» The political environment was thrust into turmoil after the constitutional court canceled the first round of voting in the presidential election, a process that is now suspended. «Foreign investors could see the worst is over for the time being,» said Baris Sozen, Akbank’s deputy head of treasury in Istanbul. «There has been an influx from the Halkbank IPO, and foreigners have been selling dollars.» The privatization of the state-owned lender put 24.95 percent of Halkbank on the market at 8 lira ($5.9) per share, the top of its initial range of 6.4-8 lira. The initial public offering valued one of Turkey’s largest listings at $1.9 billion. The currency was little affected in after-hours trade by March current account data, which was posted at $2.944 billion, below a forecast of $3.0 billion. The Istanbul stock index, which was bullish throughout the early part of the day, lost 0.31 percent by its GMT 1330 close at 44,681.09 points. It lost 4.4 percent last week amid political tensions.