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Terror Alarm In England Rattle European Markets and Turkey

Iran Materials 11 August 2006 16:33 (UTC +04:00)

(Zaman) - Revelation of a terrorist plot to blow up passenger airplanes flying between London and North America, seriously affected the Stock markets in Europe and Turkey.

While the US dollar climbed to 1,4575 new Turkish liras (YTL), the Istanbul Stock Exchange (ISE) lost two percent in the morning, but later recovered to close at a loss of 0,46 percent, reports Trend.

Britains FTSE 100 index declined 1.79 percent, Germanys DAX 2.26, and Frances CAC 40 index 1.77 on Thursday.

British Airways shares lost 3.5 percent, Ryanair 3, and Lufthansa 2.3 percent.

Turkish markets were also affected negatively.

The dollar rose from YTL 1.4410 to 1.4575 on the Interbank market finally closing at YTL 1.4410.

Affected by the drop in European stock exchanges, ISE lost 1.42 percent in the first session, but later recovered from some of the losses in the second session, closed with 0.46-percent decline.

Although the U.S.s Federal Reserve (FED) gave a pause to the two-year steady interest increase, U.S. stock exchanges closed lower on Wednesday influenced by the news on the growth of the economy however, a surprise money coming to ISE boosted the market value 2.81 percent.

The ISE rose more than international stock exchanges on Wednesday, therefore we were expecting profit making. However, following the terror alarm in Britain, ISE suffered a loss along with the European stock exchanges, Alternatif Investments representative Murat Gurcan said.

Trading volume on the ISE was YTL 1.41 billion, a 19.4-percent fall compared to the day before.

Interest drops will be limited

The Bond market expects the Turkish Central Bank to decide on a limited interest drop at the Turkish Monetary Policy Board meeting due this month.

Turkish lira strengthened after global liquid assets increased in developing markets prompted by the FEDs decision not to raise the interest rates.

Interest rates dropped following monetary influx to Turkey; however, we are not expecting interest rates to go below funding cost, Tekfenbanks Treasury Bond Manager Bulent Muhur said.

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