ISTANBUL -- Turkey's benchmark Borsa Istanbul 100 index closed on April 1 above 70,000 for the first time since December. Local elections on March 30 saw the ruling Justice and Development Party secure victories, which has eased concerns about political instability in the country.
The country will hold a presidential election in August. In the meantime, much attention will be focused on the U.S. Federal Reserve's monetary policy, which is expected to affect the country's currency and politics.
After reaching a record high last May, the Borsa Istanbul 100 started to fall due to speculation about the U.S. Federal Reserve's reduction of its quantitative easing policy. Protests across Turkey also affected the stock market. Though the index stopped falling for a while, funds left the country again as uncertainties over emerging economies grew with the Fed's decision in December to scale back its quantitative easing policy.
That same month, allegations of corruption against the prime minister and his aides emerged, which helped push the index to its lowest level in about one year and eight months in early March.
The consensus view is that if Prime Minister Recep Tayyip Erdogan is elected president in August, and his ruling party can build a stable administration, investors will continue to buy Turkish stocks.
Erdogan is seeking to amend the country's constitution to introduce a stronger presidential system. He could attempt to do this by dissolving the parliament and holding a national referendum to secure the necessary number of seats to implement constitutional amendment.
"If there are more elections after the presidential election, the market will remain concerned about political uncertainty," said an official at TEB Asset Management.