Turkish stocks and the lira tumbled on Friday as rising tensions following an air strike in Syria's Idlib province that killed 33 Turkish soldiers exacerbated a wider meltdown in emerging market assets over fears of the coronavirus spread.
The lira tumbled to a 17-month low of 6.2525 against the dollar in early trade but later curbed some of the losses to trade 0.1% weaker at 6.2005. The currency has weakened more than 4% since the start of the year.
The main BIST 100 share index fell 10% at open despite a day-long ban in short selling. The index recovered some losses but still traded down 3.9% at 1105 GMT. The banking index dropped 5.79%.
Trading circuit breakers were applied to several stocks on the exchange. The Turkish Capital Markets Board said it had banned short selling on all shares listed on the Istanbul bourse on Friday. It has taken similar steps in the past in times of high volatility, including last year.
Turkey's hard-currency assets also felt the heat. The cost of insuring exposure to the country's sovereign debt hit a four-month high of 351 basis points while many of its dollar-denominated bonds dropped between 3-4 cents.
In a "flash crash" in Asian trade on Aug. 26 last year, the lira briefly hit 6.47 when liquidity was very low.
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