Turkish shares rose almost 2 percent on Friday on a rally in banking stocks, while the lira firmed against the dollar, helped by a drop in the cost of insuring government bonds against default and reviving confidence in monetary policy. The main Istanbul share index closed 1.8 percent higher at 61,111.30 points, outperforming a 1.2 percent rise in the MSCI emerging markets index.
Banks led the rally, closing up 1.9 percent. "We see banking shares trying to catch up with the increase of the main index, leading the rally as banking shares make up around 32 percent of the main index," said Hakan Tezcan, a strategist at YF Securities. By 1600 GMT, the lira traded at 1.7555 against the dollar, compared with 1.7680 in late trade on Thursday. Against a euro-dollar basket, the lira stood at 2.0318, compared with 2.0375 in late trade on Thursday. Turkey's 5-year credit default swaps - the cost to insure government bonds against default - had fallen to 266 points as of Thursday from above 300 points in January, according to Markit data.