Turkish stocks failed to hold early gains on Monday as political tensions escalated following the jailing of Istanbul Mayor Ekrem Imamoglu, President Tayyip Erdogan’s main rival.
The benchmark Borsa Istanbul index (.XU100) ended last week down 16.6%, its worst drop since 2008. After rising 3% in early trading, it slipped 0.8% by 1126 GMT, while the banking index (.XBANK) fell 1.26%, extending last week’s 26% plunge.
Imamoglu’s detention has triggered Turkey’s largest protests in a decade and rattled markets, with analysts warning of prolonged instability.
“The protests are the most significant in years, making the outlook highly uncertain,” said Wolfango Piccoli of Teneo. “Erdogan’s political agenda is once again damaging Turkey’s economy.”
To stabilize markets, Turkey’s capital markets board banned short selling and eased stock buyback rules until April 25. The lira traded at 37.98 per dollar, slightly weaker than Friday’s close, while sovereign bonds recovered some losses after last week’s sharp drop.