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 Oh noes: Turkish Stocks Drop After Delayed Opening Amid Anti-Government Protests

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Oh noes: Turkish Stocks Drop After Delayed Opening Amid Anti-Government Protests  Vide
PostSubject: Oh noes: Turkish Stocks Drop After Delayed Opening Amid Anti-Government Protests    Oh noes: Turkish Stocks Drop After Delayed Opening Amid Anti-Government Protests  Icon_minitimeMon Jun 10, 2013 6:12 am

The benchmark Bourse Istanbul 100 index dropped 1.82% to 76,903 in initial trading at 0750 GMT, while the lira weakened 0.71% to 1.8887 per dollar. Benchmark two-year Turkish government bonds were unchanged at 6.55% as the market opened. The exchange said in a statement Monday morning that the opening of markets was delayed "due to a technical problem in index calculation in the equity markets," without providing further details.

Turkish markets have been hard hit by the mounting demonstrations that erupted into a country-wide protest against Mr. Erdogan after police used excessive force to break up an environmentalist sit-in to save a central Istanbul park.

The prime minister's defiant stance against the biggest opposition to his government in more than a decade sent stocks into bear territory last Thursday, weakened the currency and significantly drove up borrowing costs from 5.23%, near a record low the previous week.

In a series of speeches over the weekend, Mr. Erdogan has blamed a cabal of economists, investors and journalists the government calls the 'interest-rate lobby' for spurring the unrest to manipulate Turkish markets for their own financial gain. The prime minister also urged supporters in back-to-back rallies on Sunday to take out their money from private banks and deposit it in state banks.

"Interest-rate lobby, set yourself in order. For years you have exploited the sweat of my nation. No more... Those who tried to crash the stock market without any shame: Tayyip Erdogan doesn't have money in the stock market, it will be you who will crash," the premier said Sunday, adding that authorities will be probing signs of speculation.

The unrest triggered reports from Fitch Ratings and Moody's Investors Service, both of which have recently raised Turkey to the bottom rung of investment-grade status.

"These political disturbances become increasingly credit-negative the more they intensify and the longer they continue because they heighten the government of Turkey's, (rated) Baa3 stable, susceptibility to balance-of-payments risks through reduced tourist arrivals and portfolio investment inflows, an important source of current account funding," Moody's said early Monday in a report.

In a report last week, Fitch had said the protests aren't a rating threat. Turkey has been a darling of investors among emerging market economies in recent years, with an economy that has expanded an average 5% annually in the past decade to reach $786 billion last year. Mr. Erdogan's government has been eyeing an upgrade from junk status from Standard & Poor's as well as officials try to double economic growth to 4% this year.

"Turkey can wave goodbye to that third investment-grade rating as long as demonstrators remain on the streets and Turkey remains polarized," said Tim Ash, head of emerging-market research at Standard Bank in London.

http://online.wsj.com/article/BT-CO-20130610-701358.html?mod=googlenews_wsj
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