AsianFin -- Turkish markets experienced one of the steepest declines globally as President Recep Tayyip Erdogan's political purge deepened, sparking investor panic. The lira plummeted, equities triggered a trading halt, and government bond yields surged to their highest levels this year following the arrest of a key political rival.

The benchmark Borsa Istanbul 100 Index plunged 6.9% at the opening, prompting a trading suspension under the exchange's circuit-breaker rules. Upon reopening, stocks remained 4.6% lower.

Sovereign 10-year bonds tumbled, with yields soaring 175 basis points to 29.94%. Meanwhile, the lira fell more than 5% against the U.S. dollar, marking the worst performance among global asset classes.

The turmoil followed the detention of Istanbul Mayor Ekrem Imamoglu on Wednesday morning, just a day after Turkish authorities revoked his university diploma—a move that could disqualify him from challenging Erdogan in the next presidential election. Imamoglu, 54, is one of Turkey's most popular politicians and a top contender for the presidency. He defeated Erdogan's handpicked candidate in last year's Istanbul mayoral race and was poised to be named the presidential candidate for the Republican People’s Party (CHP), the main opposition group, this Sunday.

The arrest has heightened political uncertainty, further rattling investors already concerned about Turkey's economic stability and governance. The market reaction underscores the growing risks associated with Erdogan's tightening grip on power and its impact on the country's financial landscape.