(Bloomberg) -- Turkish stocks entered a bear market, with banking shares proving the biggest drag on the benchmark index, as the lira continues to lose ground and political woes keep dominating headlines.
The Borsa Istanbul 100 Index fell 1.9% on Wednesday, dropping more than 20% from a high reached in February. Eighty-four members of the gauge declined, with lenders Turkiye Garanti Bankasi AS and Akbank T.A.S. contributing the most index points to the slump. The country's currency retreated as much as 1% against the dollar.
It's been a bumpy ride for Turkish shares this year. The index entered bull territory in late February as traders welcomed greater stability in the currency after 2018's slump, with the central bank working to regain credibility and geopolitical tensions fading.
But that optimism has almost completely dissipated as local elections returned political turmoil to the top of investors' minds and the lira became the worst-performing emerging-market currency after Argentina's peso. Additionally, a rout in assets from developing countries added to pessimism, just as tensions in the Gulf increased.
Read more:
- Deposed After 18 Days, Istanbul Hopeful Won't Let Up in New Race
- On May 21: Turkey Tells Banks to Slow FX Buying in Latest Lira Defense
- On May 21: Turkey's Adjusted Consumer Sentiment Hits Lowest on Record
To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, John Viljoen, Blaise Robinson
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