Turkish markets tumble while global markets dip
Posted by meb at November 20th, 2008
Global and Turkish markets were down yesterday on bleak news about the economic outlook. The İstanbul Stock Exchange (İMKB) closed the session at 21,929.27, a drop of 6.66 percent from the previous session’s close. The last time the İMKB saw numbers below 22,000 points was in 2004.
Gökhan Uskuay, a financial strategy director at Turkish Yatırım, said, “The news of bank layoffs, negative stories about the global recession and finally the statement from Finch Ratings that Turkish banks are facing a near-term challenging outlook have increased sell-off pressures in the market.” He went on to say that concerns are growing and that the spread of the financial crisis to non-financial sectors is the major reason behind the negative situation in the Turkish markets. The decline in the İMKB may continue depending on further developments. The dollar was trading at YTL 1.68.
European shares were down 1.4 percent by midday on Wednesday, with the banking and pharmaceutical sectors the biggest fallers, though HBOS was an exception on hopes that its acquisition by Lloyds TSB would go through.
The FTSEurofirst 300 index of top European shares was down 1.4 percent at 833.53 points, having earlier touched a low of 828.84 points. Banks took the most points off the index, though stocks were mixed within the sector.
The pharmaceutical sector also weighed heavily on the index. AstraZeneca lost 5.1 percent after the company confirmed that its rival Teva had gained approval for a generic version of Astra’s Pulmicort asthma drug.
Commodities were under pressure after crude retreated 0.4 percent and copper fell back 1.7 percent. Royal Dutch Shell and Total were 0.7 and 1.8 percent lower, respectively.
Across Europe, the FTSE 100 index was down 2 percent, Germany’s DAX was 1.4 percent lower and France’s CAC 40 dropped 1.7 percent. On the upside, Experian was 10.9 percent higher after it posted an 8 percent jump in first half results and said third quarter revenue growth should also be sound. Reckitt Benckiser gained 3.4 percent after Citigroup started coverage of the group with a “buy” rating and 3,000 pence price target.
Wall Street also edged lower Wednesday, as investors, already nervous about the fate of the top US automakers, scoured more discouraging economic data. Investors vacillated in early trading, trying to hold on to the gains achieved in the previous session. But they found little consolation in new reports on consumer prices and new-home construction, which provided more evidence that the economy remains in flux. According to the US Labor Department’s Consumer Price Index, consumer prices plunged by the largest amount in the past 61 years in October as gasoline pump prices dropped by a record amount. While lower prices might be good for the consumer, they can hurt corporate profits. Lower prices also raise the threat of deflation, a prolonged bout of falling prices that hasn’t been seen in the US since the Great Depression of the 1930s.
Meanwhile, a US government report on the housing sector showed that the industry’s severe correction continues. The US Commerce Department reported that construction of new homes plunged 4.5 percent last month to the lowest level on government records.
source: Today’s Zaman
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