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 9.8%, outperforming all other major world markets, and is headed for the biggest single-day advance since 2008. Investors took heart from government efforts to channel billions of liras from state institutions and steps by the stock exchange to contain volatility.
“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
Out of 100 members in the gauge, 99 stocks climbed, with 73 posting gains more than 9%. The only stock that did not join the rally belonged to Iskenderun Demir ve Celik, a steelmaker in the quake-zone, whose trading remained suspended. Today’s gains are set to leave the benchmark just 1% below where it traded on Friday, before two days of heavy losses after the Feb. 6 twin earthquakes.
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.
(Updates with more details on gains from second paragraphs.)
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