Turkish stocks and the lira rose on Friday, catching up with emerging markets gains on Thursday when local markets were closed for a holiday, and on hopes the government may still ink a deal with the IMF. The lira traded at 1.4895 against the dollar, off opening highs, from 1.4955 on Wednesday. The yield on the benchmark August 3, 2011, bond settled at 8.59 percent from a previous 8.58 percent.
Faster-than-expected growth pulling the US economy out of recession, revealed in data on Thursday, buoyed investor appetite for high-yielding but riskier emerging markets. Turkish financial markets were closed on Thursday to mark Republic Day, a national holiday.
"The market is expected to make up for Wednesday's losses today on the back of positive global sentiment following the US growth data yesterday," wrote Erkan Savran, head of research at AK Invest, in a research note. The main stock index climbed 2.5 percent to 50,074.51, reversing most of Wednesday's 2.96 percent decline. The index has climbed 6.7 percent in October, bringing gains this year to about 85 percent, higher than any other emerging market other than Russia.
The emerging markets equity index rose 0.89 percent on Friday. "It is becoming increasingly clear that the rally is losing steam and valuations are not justifying more upside in the short term," Savran said. "On the flip side, expectations of an IMF agreement are still alive and keeping sellers at bay."
Turkey has been in on-off talks with the International Monetary Fund since its last loan accord expired in May 2008. Prime Minister Tayyip Erdogan's government has balked at the spending restrictions the IMF wants implemented as it tries to lift the country out of its deepest recession on record. Petkim, a petrochemicals maker, rose 2.03 percent to 7.55 lira.
It posted on Wednesday a net profit of 24.5 million lira in the third quarter from a 35.38 million lira loss in same period last year. Anadolu Hayat Emeklilik, Turkey's biggest pension and life insurance fund, rose 1.99 percent to 4.10 lira. Third-quarter net profit jumped 76 percent to 24 million lira, according to an income statement on Wednesday. Kardemir rose 3.23 percent to 0.64 lira after HSBC started coverage of the steelmaker on Friday, rating it "overweight" and giving it a price target of 0.84 lira.
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