World Markets Unnerved by Turkey's Financial Turmoil
BANGKOK (AP) — World stock markets fell Friday, particularly in Europe, as investors worried about the financial stability of Turkey, where the currency has nosedived.
KEEPING SCORE: Germany's DAX fell 1.7 percent to 12,466 and the CAC 40 in France fell 1.2 percent to 5,436. Britain's FTSE 100 sank 0.6 percent to 7,692. The future contract for the Dow Jones industrial average was down 0.4 percent and the contract for the S&P 500 lost 0.5 percent.
ASIA'S DAY: Japan's Nikkei 225 index lost 1.3 percent to 22,298.08 and Hong Kong's Hang Seng gave up 0.8 percent to 28,366.62. The Shanghai Composite index recovered from early losses to end flat at 2,795.31. Australia's S&P ASX 200 declined 0.3 percent to 6,278.40. In South Korea, the Kospi lost 0.9 percent to 2,282.79. India's Sensex fell 0.3 percent to 37,908.92. Shares were lower in Taiwan, Thailand and Singapore but rose in Indonesia.
TURKEY: Turkey's government was due to outline a new economic model on Friday as worries over debt deepened. The currency has hit a series of record lows and is now down 66 percent this year against the dollar. President Recep Tayyip Erdogan has sought to keep interest rates low to support economic growth, but independent economists say the central bank should be free to raise rates to rein in inflation and help the currency. Some European banks could be exposed to losses in Turkey, but analysts caution that the impact globally should be contained.
ANALYST'S VIEWPOINT: "Officials are reportedly preparing stimulus measures in a bid to prop up growth, but these would simply exacerbate Turkey's economic vulnerabilities and could ultimately tip the country into a full-blown crisis," Capital Economics said in a commentary.
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