Turkish stocks soared on their return from a week-long suspension after authorities threw their full weight behind investors to avoid a repeat of last week’s rout.
(Bloomberg) —
Turkish stocks soared on their return from a week-long suspension after authorities threw their full weight behind investors to avoid a repeat of last week’s rout.
The Borsa Istanbul 100 Index rose as much as 9.4%, as the benchmark gauge recouped more than 85% of the losses it made in a rout that followed the Feb. 6 twin earthquakes in the country’s southeast. Investors took heart from the government’s measures to channel billions of liras from state institutions and the stock exchange’s steps to contain volatility. The BIST 100 was trading 9.3% higher as of 10:53am in Istanbul.
“All the measures taken seem to have been successful in boosting the equity market,” said Burak Isyar, the head of equity research at ICBC Turkey Investment in Istanbul. “The market reaction for now says most of the demands of the market players are met.”
Turkey Injects Billions of Liras to Prop Up Stocks Before Open
An indication of Wednesday’s gains in Istanbul had come from New York, where the main exchange-traded fund buying Turkish stocks had advanced the most since October on Tuesday. The rally followed the government’s announcement that its sovereign wealth fund will support equities with a new internal mechanism. Officials also unveiled tax waivers and easier rules for share buybacks.
Separately, the country’s stock exchange said it will not allow order cancellations, price worsening and quantity reduction. The Capital Markets Board advised brokerages to consider public trust when applying interest rates on leveraged accounts that failed to meet requirements.
Turkish authorities suspended trading on Feb. 8 and canceled trades made that day after the earthquakes destroyed large parts of 10 cities in Turkey. The benchmark Borsa Istanbul 100 Index, which was already the worst-performing equity market in the world this year, tumbled almost 10% in the two days it remained open after the disaster.
“The first few days may still be volatile,” said Burak Cetinceker, a money manager at Strateji Portfoy in Istanbul.
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