Stock Markets Seek Corrections After Lira Scare
European stock indexes traded higher on Tuesday after two days of selling sent stock prices broadly lower in Europe and across the globe. Traders took a breath of relief after the Turkish lira firmed on Tuesday and Turkey’s central bank committed to providing liquidity. Turkish Finance Minister Berat Albayrak also committed to giving a conference call with investors later this week, his first such call since he started his job two months ago.
European markets were particularly hard hit in recent days due to the region’s economic ties to Turkey, with European banks taking the brunt of the burden. As of 11:45 a.m. GMT, the FTSE was up 0.09 percent, the DAX was up 0.34 percent and the CAC was up 0.30 percent. Asian markets saw some solid gains on Tuesday as well, with the Nikkei 225 surging 2.28 percent for the day, and the ASX 200 gaining 0.76 percent. The Shanghai Composite and the Hang Seng Index both ended lower.
U.S. stock futures were also higher before the New York open, with investors actively trying to shake off their fears about the Turkish economic crisis. Concerns had grown in recent days not only because of the devalued lira but because of U.S. President Donald Trump’s threat to double metal tariffs on Turkey. The Dow is expected to rise triple digits on the open. The S&P, which had been on trajectory to break its January highs last week, is also expected to open higher, though this breakthrough may take longer than originally expected. August is a slow month for trading as is, and the recent Turkish shakeup did not help. However, the bulls remain optimistic that this breakthrough will arrive in due time. Bears remain confident that the market may be setting up for a double top which could send markets lower sooner rather than later.