As the governing Justice and Development Party (AK Party) fell 18 seats short of the 276 needed to form a single-party government, fearing from political uncertainty, the markets didn’t initially react well to the results. Turkey’s financial markets were shaken on Monday, however on Tuesday the stock exchange gained momentum, while the lira strengthened both against the dollar and the euro.
The BIST 100 index ended the day 0,44 points up from 78,146 points, after closing 5.05 percent down on Monday.
On the money markets, even though speculations regarding US Federal Reserve’s sooner than expected rate hike intensified, this didn’t give the dollar a significant boost. The dollar stayed steady against a basket of currencies in the global markets. Both this development and strengthening in the lira pulled the dollar/lira parity to 2,75. The lira traded on the same levels as Monday around 3,10.
Meanwhile, although it also eased, Turkey’s 10-year benchmark bond rate stayed at double digits and traded around 10,29 percent on Tuesday.
Markets will be watching the coalition talks and the political atmosphere very closely.