Turkish financial markets strengthened early on Friday with the main stock index breaking its 2009 record high as hopes of a fresh loan deal with the International Monetary Fund supported sentiment, dealers said. The lira traded firmer at 1.5420 to the dollar in early trade compared to a close of 1.5520 on Thursday.
The benchmark February 2, 2011, bond yield firmed to 12.06 percent, compared with 12.18 percent on Thursday. Investors are monitoring developments on a possible IMF loan deal to succeed a $10 billion accord that expired in May 2008.
The main share index rose 1.1 percent to a new 2009 high of 36,722 after rising 1.59 percent on Thursday. "The equity market continues to exhibit its resilience and is testing critical resistance levels. This can be attributable to prevailing expectations on the possibility of a new stand-by deal with IMF," Tera Stockbrokers said in a daily note.
Markets jumped last week on hopes that an IMF deal was close or had already been reached, but officials have since cooled those expectations by saying only that talks were continuing.
Tera said attention would focus on a news conference scheduled for 11 am (0800 GMT) at which armed forces commander Ilker Basbug was expected to address the issue of an alleged military plot to undermined the Islamist-rooted ruling AK Party. Tensions between the business-friendly AK Party and the powerful military have shaken markets in the past.
The army has denied involvement in any such plot and Prime Minister Tayyip Erdogan has pledged to press on with an investigation into the document which brought the alleged plot to light. The document, published this month by daily Taraf, laid out an alleged military plan crafted by a navy colonel to stop the AK Party and a religious movement from "destroying Turkey's secular order and replacing it by an Islamist state".
Shares in flag-carrier Turkish Airlines rose 1.9 percent to 2.17 lira, extending gains on Thursday when it issued bonus shares. In an interview with Reuters, the company's chief executive said it targeted more than $5 billion sales in 2009, up from $4.7 billion last year. Carmaker Tofas, a unit of Koc Holding, was up 1.5 percent after it said it was 13.33 percent stake of Entek Elektrik to Aygaz, also a unit of Koc, for 32.7 million lira.