Turkish stocks dropped 1.7 percent and benchmark bond yields rose to 6.51 percent on Monday from 6.21 percent on Friday after a weekend crackdown by police on protesters.
Riot police stormed Istanbul's Gezi park on Saturday night, sparking a night of rioting after Prime Minister Tayyip Erdogan gave protesters a final warning. Police last week cleared neighboring Taksim square using water cannons and teargas.
"The crisis has taken a turn for the worse due to the ongoing police crackdown on anti-government protesters," Wolfango Piccoli, managing director of consultancy firm Teneo Intelligence said on Sunday.
(Read More: Turkey Enters New 'Phase' After Police Action)
The two weeks of protests were originally sparked over plans to develop a shopping mall in Istanbul, but have escalated into anger at the government and Erdogan's perceived authoritarian rule.
On Sunday, Erdogan spoke to thousands of supporters of his AKP party in Istanbul and said the protesters had been manipulated by "terrorists". He also lashed out at foreign media companies, singling out BBC, CNN and Reuters, accusing them of fabricating news.