Updates: IYI Parti will be part of the elections and win - Meral Akşener

Update, 11.06 am EST: Meral Akşener, the leader of the Turkish centre-right opposition Good Party, following the declaration of an early elections by Turkish President Erdogan, Meral Akşener said as a Good Party, "we are starting to work for the election as of now. I am the candidate for the presidency, I will be nominee with 100,000 signatures. Everybody should know his/her limits. IYI Party will be part of the elections and will win."

Meral Akşener

Turkey will hold presidential and parliamentary elections on June 24, almost 18 months earlier than planned, President Recep Tayyip Erdoğan said.

The government is bringing the elections forward from November next year due to events including political and military tensions in Syria, Erdoğan told reporters in televised comments at the presidential palace in Ankara on Wednesday.

Turkey is holding elections as the economy shows signs of overheating and after a military operation in northern Syria to battle Kurdish fighters allied with the United States in battles against Islamic State (ISIS).

"Erdoğan shows his tactical genius again, totally catching everyone off guard," said Tim Ash, senior emerging markets strategist at Blue Bay Asset Management in London. "The market is loving it... by going early he reduces the period of uncertainty in Turkey, and guess the hope is that a new government in place by late June they can better address some of the big challenges facing Turkey."

The lira strengthed to 4.07 per dollar in Istanbul after the announcement from 4.095 earlier. The main BIST-100 share index climbed 1.6 percent in istanbul, reversing earlier losses.

Erdoğan is seeking a second term as president. The elections will cement the introduction of a presidential system of government approved in a public referendum last year. He is expected to face challenges from Meral Aksener, leader of the Good Party (IP) and Kemal Kilicdaroglu, who heads the main opposition Republican People’s Party (CHP).

It was the first time Erdoğan has called early elections since his ruling Justice and Development Party (AKP) won power in 2002.

It wasn't immediately clear whether Aksener's Good party, formed only months ago, would qualify to run in the elections, news channels including CNN Turk said.

"This government's rule is defective. This early election is an announcement of that," CHP spokesman Bülent Tezcan said in response to the news.

"As the CHP, we are ready."

The majority-Kurdish Peoples' Democratic Party (HDP) blamed the government for creating the "chaos" they said had necessitated early elections.

"Their aim is to rescue themselves. They have been unable to deliver the environment they promised to society. They have been unable to pass adjustment laws. Everything is in chaos, actually," HDP spokesman Ayhan Bilgen said.

(Updates with comments from analyst in fourth paragraph, stocks in fifth)