Turkish stocks decline over recession concerns

Bloomberg

The Istanbul Stock Exchange’s IMKB index lost 1.4 percent to 34,909.06 at the close of trading in Istanbul, led down by Garanti Bank, the lender part-owned by General Electric.

Turkey’s benchmark index has gained 47 percent since March 1 on bets that interest rate cuts and a possible loan accord with the International Monetary Fund will lift the country out of a recession as early as the third quarter. The World Bank said yesterday that the global economy will probably shrink 2.9 percent this year, more than previously forecast. Turkey’seconomy may contract 5.5 percent, it said. "We are seeing a correction after a rally in the markets since March," said İnan Demir, an economist at Finansbank in Istanbul. "The Turkish market is falling less than other markets in the region because IMF-related news provides insurance."

Talks between the government and IMF snarled in January over spending plans and tax administration. The two sides will continue their meetings in Ankara and Washington, IMF First Deputy Managing Director John Lipsky said after meeting Deputy Prime Minister Ali Babacan last week.

Garanti Banki fell for a third day, losing 8 kuruş, or 2 percent, to 3.9 Turkish Liras. Koç Holding, fell the most since April 20, losing 12 kuruş, or 4.6 percent, to 2.52 liras.