Turkey’s markets welcome AKP poll win

ISTANBUL

REUTERS Photo

Turkish markets and assets have begun the day positively, betting that the ruling Justice and Development Party’s (AKP) victory in the local elections will secure political stability.

Turkey’s main stock exchange opened the day with a 1.95 percent gain, while the Turkish Lira hit a two-month high against the dollar at 2.163. The March 30 election results are perceived as being a vote of confidence from the electorate in the party and Prime Minister Recep Tayyip Erdoğan.

Turkey’s currency strengthened to almost 1.5 percent at 2.163 against the dollar, which is at its strongest level since Jan. 29, 2013.

Despite losing some impetus by losing some of its gains by dropping to around 69,331 points after starting the day at over 70,000, the stock market is also expected to continue basking in the election results.

Party officials had set a loose target of equaling the 40 percent share of the vote that the AKP won at the previous local election in 2009, and the party’s winning of approximately 44 percent of votes this time is expected to reassure investors.

JPMorgan economist Yakın Cebeci had assigned a 55 percent probability to support for the ruling party coming in at 40-45 percent, describing it as a “silver-lining scenario” that could see Erdoğan consolidate power and win the presidency in August. “This is obviously the most market-friendly outcome,” he had said in a note to clients.