Turkish markets undercut by Fitch credit outlook change to stable
ANKARA (Reuters) – Turkish markets were hit by a credit ratings outlook cut by Fitch yesterday, with stocks, bonds and the lira weakening on concern that increased political risks could cloud the country’s economic future. Weaker global markets also contributed to the drop in asset prices. «There was some selling after the change in Fitch’s (Turkey credit) outlook. But this does not look to be lasting. It had an impact because European markets generally were lower,» said Istanbul-based Seker Investment’s Edmon Nergisyan. Turkish stocks slipped 0.1 percent, or 47.11 points by the close of trade to finish at 45,055.57. They had been up 0.37 percent at the midday break. Trading volumes on the exchange, however, were their highest of the year and close to the all-time record of 3 billion lira. Fitch cut its outlook for Turkey to stable from positive despite «impressive growth performance and strong FDI inflows,» sovereign ratings analyst Edward Parker said in a statement. «Negative political shocks have raised event risk and clouded the credit outlook,» he said. Fitch’s decision contrasts with rival Moody’s Investors Service, which said on Wednesday it did not expect the political crisis to derail the European Union candidate’s ‘Ba3’ credit rating. Fitch affirmed its ‘BB-‘ rating, which is the same as Standard & Poor’s.
