Turkish stock market rises, lira stable as emerging economies fall in US elections

Turkey’s main stock index opened at 8,647.94 points on Wednesday, up 0.34% or 29.37 points from its previous close, while the Turkish lira was little changed. in response to the US election results despite a slowdown in emerging markets (EMs) caused by a sharp decline in the Mexican peso.

On Tuesday, the Istanbul Stock Exchange’s BIST 100 index fell 0.52% to close the day at 8,618.57 points with a transaction volume of 68 billion liras ($1.97 billion).

As of 11:20 local time (8:00 GMT) on Wednesday, the BIST 100 index continued to rise to 8,683.31 points, while the Turkish lira traded at 34.22 against the US dollar, broadly stable.

Republican Donald Trump’s return to the White House sent most emerging market currencies tumbling on Wednesday, sending their benchmark MSCI Intl index tumbling.

The Hungarian forint, Czech koruna, South African rand and Polish zloty nearly followed the Mexican peso in losses early Wednesday, while the Indian rupee and Hong Kong dollar fell slightly.

The Turkish lira and the Argentine peso were among the leaders of growth.

The Mexican peso fell to its lowest level in more than two years on Wednesday, extending a streak of volatility and weakness for emerging market leaders.

The peso fell to 20.8038 to the dollar for the first time since August 2022, more than 3% lower than its previous close, the biggest such drop since Mexico’s summer elections roiled domestic assets. While emerging market currencies were hit hard by the rising dollar, the peso took some of the biggest losses.

“The Mexican peso has been hit hard,” said Chris Turner, global head of markets at ING. “High volatility is also undermining the carry trade and it is difficult to rule out a move towards 22.00 in the coming weeks.”

Following Trump’s presidential victory in 2016, the peso fell about 8.5% against the dollar to an all-time low at the time.

The US currency’s rise began after the first signs of a Republican victory in Georgia and continued to gain momentum, with the dollar index reaching a four-month peak.

Markets were concerned that the US’s southern neighbor could face trade barriers under a possible Trump presidency.

Traders generally rushed to buy dollars in anticipation that Trump’s victory would mean the implementation of his protectionist policies, which would support the US currency.

Elsewhere dollar growth Against the yen, shares in Tokyo were at one point up more than 3%, helped by gains in exporters, while markets in Sydney, Singapore, Taipei, Mumbai and Bangkok also rose.

However, there were losses in Shanghai, Seoul, Wellington, Manila and Jakarta.

Hong Kong also fell sharply – at one point down almost 3% – on concerns about the impact of the Trump presidency on China’s economy. and relations between Beijing and Washington.

Traders got a strong boost from Wall Street, where all three major indexes rose more than 1%.

While the election results are being closely watched around the world, they are of real interest in China after Trump vowed to intensify the trade battle with the economic titan by imposing huge tariffs on goods from the country.

The vote comes as Chinese leaders hold a key meeting to hammer out a stimulus package aimed at boosting growth and bolstering the colossal property sector, which is mired in a painful debt crisis.