Turkey’s central bank comes to the aid of global stocks

He said, however, there had been little fundamental change to celebrate and added: “It’s only a temporary thing for Turkish markets, I’m not sure [volatility] is over.”

The Turkish worries have in recent days driven a capital exodus from across emerging markets, sending currencies from the Argentine peso to the Indian rupee to record lows, while emerging-market equities have tumbled almost 20% from January highs.

There are also concerns about China’s slowing economy — reinforced by this week’s data on investment and industrial output — and the yuan’s weakening to 15-month lows against the dollar is also pressuring other Asian markets.

Indonesia, acting after the rupiah fell to three-year lows, raised interest rates for the fourth time since May European shares opened flat, although liquidity was severely thinned by a holiday in many countries.

Earlier, Asian shares excluding Japan slid more than 1% to one-year lows while MSCI’s all-country equity benchmark was 0.25% lower.

But it stayed off one-month lows reached on Monday.

Chinese shares lost more than 1%, pressured by signs the world’s second-largest economy is losing momentum amid a trade conflict with Washington. Japanese shares too dropped 1%. US President Donald Trump has slapped hefty tariffs on a swathe of Chinese goods, prompting retaliation from Beijing.

Global trade tension shows little sign of easing, with Beijing now lodging a complaint to the World Trade Organisation to help determine the legality of US tariff and subsidy policies.

Turkey too has raised tariffs on some US products “in response to the US administration’s deliberate attacks on our economy”, Vice-President Fuat Oktay wrote on Twitter on Wednesday.

President Tayyip Erdogan has called a boycott on US electronic goods.

Jameel Ahmad, global head of currency strategy at FXTM brokerage said the escalation of tension between the US and Turkey reminded investors “it is not just the US and China that stand at the heart of the global trade war concerns”.

Wall Street closed higher on Tuesday, continuing to draw support from forecast-beating company earnings but New York stocks appear set for a weaker opening, futures show.