Turkish shares plunged nearly 4 percent and the lira fell close to 1.70 levels on Wednesday, following the global markets' tumble as recession fears continue to grow.

The lira weakened to as much as 1.69 against the dollar on the interbank market on Wednesday, but later recovered and traded at 1.67 levels. It has weakened some 30 percent against the U.S. currency this year.

The main share index dropped nearly 4 percent to 22,500 levels, trading at its lowest levels since early 2005 and down more than 58 percent from end-2007. It underperformed the MSCI emerging stocks index which weakened 1.58 percent.

"Turkish stocks headed lower today on gloomy earnings across the globe and concerns over the domestic non-financial sector. (An) ongoing global economic slowdown .... continued to weigh on the stocks," brokerage Is Yatirim said in a note.

European and Asian stock markets also dropped on Wednesday ahead of expected losses on Wall Street amid concerns about the future of the U.S automotive industry and ahead of the country’s crucial inflation and housing data.

The FTSE 100 index of leading British shares was down 1.8 percent, while Germany’s DAX was 1.3 percent lower. The CAC-40 in France also fell 1.5 percent.

U.S. stocks headed for a lower open with investors worried about the economic fallout if Detroit’s Big Three automakers - General Motors, Ford Motor and Chrysler LLC - cannot persuade lawmakers to give them a $25 billion bailout.

The yield on the benchmark June 23, 2010 bond rose to 22.72 percent from 22.60 on Tuesday.