Turkey's ETF logs worst daily plunge in about 10 years as country's currency unravels

The largest exchange-traded fund to track Turkey’s equity market plummeted on Friday after the European Central Bank raised questions about a possible contagion from Turkey’s embattled currency, according to a report form the Financial Times. President Recep Tayyip Erdogan won reelection in a snap vote in June and his growing power in Ankara has unsettled investors because he threatens the independence of the country’s central bank. The iShares MSCI Turkey ETF TUR, -14.53% closed down by about 14.5%, marking its worst day since Oct. 15, 2008, according to FactSet data. The ETF had been down by as much as 21% earlier Friday. The country-specific fund has extended a recent decline that has seen it drop 51% since the start of 2018. The Turkish lira TRYUSD, -4.6719% sank against the U.S. dollar, down by about 13%, after losing a fifth of its value against the dollar earlier in the session. The currency crisis has spilled over in to broader markets as President Donald Trump said in a tweet on Friday that he has authorized the doubling of existing steel and aluminum tariffs on imports from Turkey. The Dow Jones Industrial Average DJIA, -0.77% fell 0.8% on Friday, the S&P 500 SPX, -0.71% ended down by 0.7%, while The Nasdaq Composite Index COMP, -0.67% fell 0.7%.

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