Bloomberg: Boom in Turkish Bank Stocks Is Halted by $5.1 Billion Rout

Turkish bank stocks headed for their steepest three-day drop on record as recent huge gains began unwinding in a hurry.

After surging 150% in about two months, the Borsa Istanbul Banks Index has fallen 24% since Monday’s close, erasing 94 billion liras ($5.1 billion) in market value. It fell about 10% on Thursday.

The rout was triggered by Tuesday’s hotter-than-expected US inflation data and quickly spiraled as some institutions faced margin calls.

“Concerns that a steep rally could quickly turn into a very steep selloff, coupled with calls on margins intensified the pace of declines, turning them into panic selling,” said Tuna Cetinkaya, assistant general manager at Info Yatirim in Istanbul.

Turkish bank stocks have been buoyed this year by factors including strong earnings expectations. Policy makers have slashed interest rates — triggering gains in banks’ government bond holdings — despite 80% inflation.

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