Turkey’s stock market is tumbling and the lira is down over 5% against the dollar this morning after Turkish president Recap Erdoğan suffered a huge poll in elections.
Erdoğan’s AKP has suffered its first fall in support for four election after a new party representing minority Kurds in the country made huge inroads in Sunday’s polls.
The result means Erdoğan looks unlikely to be able to form a majority government and will probably have to form a coalition, possibly with Turkey’s extreme right-wing party.
Alternatively, fresh elections could be called within six weeks if no government can be formed.
All this uncertainty has sent investors heading for the hill. The Turkish stock market has opened down over 8% and the Turkish lira is down over 5% against the dollar on the news, its worst one day fall in 7 years.
Erdoğan’s Justice & Development party (AKP) won 41% of the vote, compared to 49% in 2011 elections. But the new Kurdish HD party managed to capture 12% of the vote, uniting Kurds with liberal left-wingers in Turkey.
The result is not only a blow for Erdoğan’s party but also his ambition to consolidate his own power and move Turkey to a more presidential system.
Erdoğan, who has ruled for 13 years, campaigned with a view to converting Turkey into a presidential system, rather than a parliamentary system. Voters have resoundingly rejected this vision.
NOW WATCH: Russia reveals new high-tech weapon vehicles in a rehearsal for the country’s biggest military parade
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.