Turkish stocks plummeted by almost 7%, and the 10-year government bond yields rose to their highest point for the year following the detention of Ekrem Imamoglu, a political adversary of President Recep Tayyip Erdogan. The Turkish lira also fell to a new record low.

The Borsa Istanbul 100 Index, a key benchmark, dropped 6.9%, leading to a temporary suspension of trading. Meanwhile, the benchmark yield surged by 97 basis points to 29.16%, and the lira depreciated by 0.4% to 36.8351.

Imamoglu, who serves as the mayor of Istanbul, was reportedly taken into custody at his residence on Wednesday morning after authorities invalidated his university degree. This action could potentially prevent him from challenging Erdogan in the upcoming presidential election.

Political events have a significant impact on Turkish stocks, as the country's stock market is largely influenced by local investors who tend to react strongly to periods of instability. Approximately 62.5% of Turkish equities are held by domestic investors, based on information from the Turkish securities depository’s website.