Turkish markets ended the week firmer on Friday, supported by easing concerns about the impact of next month's presidential election on political stability. Activity was depressed by the Easter holiday in most major markets. There was little reaction to a strong US jobs report.
Which reinforced the view that the Federal Reserve will leave interest rates unchanged in the short term. The lira closed at 1.3650 against the dollar on the interbank market, unchanged from its morning levels and 0.3 percent firmer than its close on Thursday of 1.3685, already an 11-month high.
In Monday-dated trade it eased back to 1.3680. Dealers said the absence of Treasury debt auctions next week deprived markets of a driving force. "There are no auctions next week. The market mood is optimistic so I don't see a reason for yields to rise... Next week the process of selecting presidential candidates will begin," said a treasury official from one bank.
Bonds were slightly firmer on the secondary market with the yield on the November 26, 2008 benchmark easing to 19.24 percent from 19.27 percent on Thursday. In Monday-dated trade the yield fell further to 19.19 percent. Istanbul's main share index closed up 0.29 percent at 45,845.24 after rising 2.36 percent to close at a 13-month high on Thursday.
Grocer Migros dipped 0.55 percent after a morning suspension in response to news on its expansion plans. It confirmed in a statement to the exchange it would invest $100 million and open 100 new stores in Turkey in 2007. Market sentiment was underpinned by lessening tensions ahead of the May presidential poll. At a Thursday evening meeting, a group of deputies from the ruling AK Party called on Prime Minister Tayyip Erdogan to seek the presidency, boosting expectations he will run.
Thursday's meeting with 30 deputies was the first in a series he will hold with his MPs before making a decision. His party has a large majority in parliament so barring a major upset, its candidate should become president.
However, there is powerful resistance to Erdogan becoming president from the main opposition party and the secularist establishment who fear the former Islamist would try to undermine the division between state and religion.