Turkish shares rose on Friday as investors were cheered by a deal among nearly all EU leaders to build a closer fiscal union while the lira hit its weakest level since November 30 as worries on the economic outlook continued to weigh. Attention was focused on October current account and third-quarter GDP data which was set for release on Monday morning and was expected to shed light on prospects for an economy in which the IMF expects growth to slow to 2 percent next year from 7.5 percent this.
Turkey's main share index closed up 0.63 percent at 53,834.91 points, outperforming the MSCI emerging markets index, which fell 1.5 percent. The Turkish index closed down 2.97 percent on Thursday. The lira traded at 1.8475 to the dollar by 1550 GMT, weakening from 1.8426 on Thursday. The currency has weakened some 16 percent against the US currency so far this year.
"We could still be in for a difficult year-end, and weak start to 2012, as global data looks set to deteriorate," said Royal Bank of Scotland economist Timothy Ash. "EM experience still suggest that the eurozone periphery needs debt relief and growth - which still seem difficult to engineer given the constrains now of the "fiscal compact" and concern still over the vulnerability of the European banking sector," he added. Led by Germany and France, 26 of the 27 nations in the European Union agreed after a two-day summit to pursue tighter integration with stricter budget discipline in the eurozone. Britain said it could not accept the proposed EU treaty amendments.
Turkey's new benchmark bond maturing on December 4, 2013 stood at 10.29 percent, up slightly from 10.27 percent on Thursday. "We are concerned about the near-term outlook for global emerging markets (GEM) as the EU summit seems to have failed to provide break-through steps to address the EU crisis," said Societe Generale global head of emerging market strategy Benoit Anne.