Global markets are in turmoil on Friday, with a historic plunge in the Turkish lira at the center of the chaos.
The lira’s decline caps a week of political news that’s unnerved investors, as the US ramped up sanctions on Turkey and Russia, and the United Kingdom fretted over a no-deal Brexit.
US investors shifted focus from strong corporate earnings to the rout in Europe, sending the major stock-market indexes lower.
A slew of unnerving headlines all week from the United Kingdom, Russia, and Turkey has culminated in a wild Friday for global markets.
Turkey is front and center of the chaos on Friday, with its currency plunging to a record low against the US dollar. A diplomatic tussle between the US and its NATO ally deepened Friday after President Donald Trump said he had authorized the doubling of sanctions on the country’s steel and aluminum.
The turmoil in Turkey raised fears over what it means for the eurozone, sparking a sell-off in bank stocks and other assets in the region.
“The plunge in the lira which began in May now looks certain to push the Turkish economy into recession
and it may well trigger a banking crisis,” Andrew Kenningham, the chief global economist at Capital Economics, said in a note on Friday.
These fears spilled over into US markets on Friday, with investors shifting their focus away from strong corporate earnings to what was happening across the Atlantic. The Dow Jones industrial average was down 229 points, or 0.9%, at 10:02 a.m. ET, while the S&P 500 was down 19 points (0.67%). The tech-heavy Nasdaq Composite was down 59 points (0.8%), and was poised to end an eight-day winning streak.
Here is what you need to know.
Turkey in turmoil
This week, the Turkish lira has fallen 23% against …read more
Source:: Business Insider