By Daren Butler
ISTANBUL, Sept 29 (Reuters) - Turkish shares hit a record high and the lira firmed to its strongest level against the dollar since January on Wednesday, boosted by positive sentiment towards emerging markets and weakness in the U.S. currency.
Bond yields also fell as minutes of the latest central bank monetary policy committee meeting were well received by markets.
'Turkish markets are taking positively the central bank talk of a possible further reduction in the overnight borrowing (rate),' said C.A. Cheuvreux analyst Simon Quijano-Evans.
'It would entice banks to place less at the central bank overnight and rather lend it on within the system or elsewhere (including the purchase of government bonds or even equities) - something that would be welcomed globally,' he wrote in a note.
The bank cut the overnight borrowing rate to 6.25 from 6.5 percent this month as part of its exit strategy from crisis-induced stimulus measures and said it may cut the rate again to reduce overfunding to the market.
The lira strengthened to 1.4540 against the dollar by the interbank close, its firmest since January and compared with a close on Tuesday of 1.4680.
'The dollar is losing ground against all currencies. It is pretty positive for the emerging market world because all that money coming from the U.S. will definitely enter emerging markets,' said a forex trader.
The yield on the benchmark April 25, 2012 bond , which had slipped to a six-week high of 8.21 percent last week after the Central Bank raised reserve requirements, dipped to 8.08 percent from 8.15 on Tuesday.
The main ISE 100 share index rose 0.43 percent to 65,866 points, touching a fresh record high and extending a rally of 1.5 percent a day earlier.
It underperformed the MSCI emerging markets index, which rose 0.76 percent. The ISE index has surged nearly 25 percent this year.
Turkey's markets have risen steadily in recent weeks on optimism over growth and aftermath of a victory for the AK Party government in a referendum on constitutional changes, as the result bode well for the party's chances of winning a third term in power when the country votes in a general election next year.
'We recommend investors take a cautious stance in trading positions as Turkish equities outperformed their peers in EM by 6.3 percent since the referendum,' Is Invest said in a note.
Turkish Central Bank Governor Durmus Yilmaz told Reuters in an interview on Tuesday the bank had raised its 2010 growth forecast after strong second quarter GDP figures.
Among shares in focus, the biggest gainer was canned fish producer Dardanel Onentas which surged 16.8 percent to 1.6 lira after it said it had signed a non-binding partnership accord with an international strategic investor designed to raise funds and pay debts to banks.
(Additional reporting by Thomas Grove, writing by Daren Butler, editing by Ron Askew) Keywords: MARKETS TURKEY/ (daren.butler@reuters.com; +90 212 350 7057; Reuters Messaging: daren.butler.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
ISTANBUL, Sept 29 (Reuters) - Turkish shares hit a record high and the lira firmed to its strongest level against the dollar since January on Wednesday, boosted by positive sentiment towards emerging markets and weakness in the U.S. currency.
Bond yields also fell as minutes of the latest central bank monetary policy committee meeting were well received by markets.
'Turkish markets are taking positively the central bank talk of a possible further reduction in the overnight borrowing (rate),' said C.A. Cheuvreux analyst Simon Quijano-Evans.
'It would entice banks to place less at the central bank overnight and rather lend it on within the system or elsewhere (including the purchase of government bonds or even equities) - something that would be welcomed globally,' he wrote in a note.
The bank cut the overnight borrowing rate to 6.25 from 6.5 percent this month as part of its exit strategy from crisis-induced stimulus measures and said it may cut the rate again to reduce overfunding to the market.
The lira strengthened to 1.4540 against the dollar by the interbank close, its firmest since January and compared with a close on Tuesday of 1.4680.
'The dollar is losing ground against all currencies. It is pretty positive for the emerging market world because all that money coming from the U.S. will definitely enter emerging markets,' said a forex trader.
The yield on the benchmark April 25, 2012 bond , which had slipped to a six-week high of 8.21 percent last week after the Central Bank raised reserve requirements, dipped to 8.08 percent from 8.15 on Tuesday.
The main ISE 100 share index rose 0.43 percent to 65,866 points, touching a fresh record high and extending a rally of 1.5 percent a day earlier.
It underperformed the MSCI emerging markets index, which rose 0.76 percent. The ISE index has surged nearly 25 percent this year.
Turkey's markets have risen steadily in recent weeks on optimism over growth and aftermath of a victory for the AK Party government in a referendum on constitutional changes, as the result bode well for the party's chances of winning a third term in power when the country votes in a general election next year.
'We recommend investors take a cautious stance in trading positions as Turkish equities outperformed their peers in EM by 6.3 percent since the referendum,' Is Invest said in a note.
Turkish Central Bank Governor Durmus Yilmaz told Reuters in an interview on Tuesday the bank had raised its 2010 growth forecast after strong second quarter GDP figures.
Among shares in focus, the biggest gainer was canned fish producer Dardanel Onentas which surged 16.8 percent to 1.6 lira after it said it had signed a non-binding partnership accord with an international strategic investor designed to raise funds and pay debts to banks.
(Additional reporting by Thomas Grove, writing by Daren Butler, editing by Ron Askew) Keywords: MARKETS TURKEY/ (daren.butler@reuters.com; +90 212 350 7057; Reuters Messaging: daren.butler.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.