Investors fret over financial crisis in Turkey

London’s blue chip index fell into the red as investors worried over whether a financial crisis in Turkey could spread across Europe.

The FTSE 100 ended the day down 0.3% or 24.56 points at 7,642.45.

Its European peers were not faring much better, with the French CAC 40 down 0.04% and the German DAX down more than 0.5%.

Investors were keeping a close eye on Turkey, which has been rattled by a stand-off with the US over its detention of an American evangelical pastor.

That has compounded fears over the country’s high inflation levels, current account deficit and growing private sector debt.

The Turkish lira has already fallen nearly 50% in the past year and was facing further pressure yesterday despite a pledge by Turkey’s central bank to provide liquidity to the country’s banks.

Turkey’s woes also piled pain on commodities, helping send Brent crude prices down more than 0.8% to $72.29 per barrel, as investors worried about how contagion could impact global demand.

The simmering trade spat between the US and China also threatened to dent global growth and appetite for oil.

The pound was hovering at its lowest level since June 2017 as it traded nearly flat against the US dollar at 1.276. Against the euro, sterling was up around 0.1% at 1.118.