All but one of the index's 11 major sectors were lower on broad-based declines across sectors.
The turmoil makes it hard for global investors to justify remaining in Europe and it is also negative for emerging markets.
U.S. President Donald Trump said on Friday he had authorised higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminium and 50 percent one on steel, as tensions rose between the two North Atlantic Treaty Organisation allies over Ankara's detention of an evangelical pastor and other diplomatic issues.
These fears spilled over into U.S. markets, with investors shifting their focus away from strong corporate earnings to what was happening across the Atlantic.
The tumult also affected Wall Street, which finished the week on a sour note, with the Dow Jones, S&P 500 and Nasdaq all finishing down on Friday. It fell yet further to 6.2 to the dollar at 1254 GMT, almost 12 percent weaker on the day.
Here is what you need to know. The weakened currency's value has helped increase inflation and anxious global investors.
The diplomatic tension and the failure of Turkish officials to persuade the USA to lift the sanctions plunged the lira to new lows this week.
House of Fraser chain goes into administration
HoF chief executive Alex Williamson said: "We are hopeful that the current negotiations will shortly be concluded". But it had the benefit of giving those workers six months to try and find new jobs.
He declared: "Our relations with Turkey are not good at this time!"
Erdogan's comments offered no support for the currency, which fell as he spoke.
"In most cases though, we suspect that this resilience will prove temporary", they said, highlighting expectations of rising USA interest rates and worries over growing USA protectionism.
President Donald Trump's decision to double USA tariffs on steel and aluminum imports from Turkey is "brutal", director of the European Council on Foreign Relations said. And under Turkey's new executive presidential system, Erdogan pretty much calls all the shots.
The pound also nosedived this week.
A stronger dollar has also put more pressure on the currency. Going in the opposite direction was the safe haven Japanese yen, which hit a one-month high against the dollar. The British sterling desperately requires some positive news around Brexit negotiations, otherwise the negative investor sentiment presents a risk that pound selling could accelerate further down than the 1.20 ladder within a matter of weeks. According to Barclays, they have pulled $51 billion from European funds since early March, wiping out the inflows of 2017.
Some economists were less impressed by the government's handling of the crisis.
"It is expected that the current account deficit would be balanced at around 4 percent", the ministry said, adding that a saving program in the public sector, which was launched this year, will continue in the medium-term.
A diplomatic source, however, familiar with talks of Turkish deputy foreign minister Sedat Onal in Washington this week, told The National that exchanging Mr Brunson for Mr Atilla is not on the table from the USA side.