Turkish stocks sink as Israel relationship strained

Turkish stocks cratered Wednesday, with the benchmark Borsa Istanbul 100 falling 7% and triggering two broad market-wide suspensions. The downside action appears to be related to concerns about the country's relationship with Israel after Turkish President Recep Tayyip Erdogan announced that he had scrapped his planned trip to Israel due to the ongoing Gaza conflict.

"We had a project to go to Israel, but it was canceled, we will not go," Erdogan told lawmakers. Erdogan said Turkey does not hold any issues with Israel, but further emphasized that it would never condone Tel Aviv's involvement in acts of atrocity. He added that he viewed Hamas as "liberators".

Further, officials in Turkey paused plans for a natural gas pipeline project with Israel.

Today's downside action in Turkey is the largest drop since the destructive February earthquakes. The market was headed for its most significant monthly downturn in over three years.

Before the recent downside action, Turkish stocks had seen a major rally this year, with the index up as much as 55% through October 3rd. The recent downside is being attributed to the escalating conflict in the Middle East and pressure on retail investors in the country, who had been using equities as a tool to beat inflation.

Among notable movers, air carrier Turkish Airlines fell over 6%.

By StreetInsider.com Staff

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