Turkey Stocks Rise to 10-Month High as China Fuels Risk Appetite

  • Stabilization in Chinese economy boosts emerging-market assets
  • 10-year government bonds rally to highest since November

Turkish stocks advanced to the highest level since May as bets China may avoid a hard landing boosted demand for emerging-market assets. Bonds rose for a third day.

The Borsa Istanbul 100 Index added 2.4 percent, extending the longest period of positive momentum in two years that started at the end of February, the directional movement index shows. Akbank TAS was the biggest contributor to the Wednesday’s increase, and the yield on the government’s 10-year local bonds fell to the lowest level since November. The currency weakened.

The rebound in Chinese exports and a narrowing decline in imports spurred speculation the world’s second-largest economy fared better than expected in the first quarter. A stabilization in Turkey’s third-largest trading partner would be another boost for emerging-market assets buffeted by volatile commodity prices and concern over a slowing global economy. The rally comes days after Turkey named a new governor to succeed Erdem Basci at the central bank, easing investor concern of a drastic shift in monetary policy.

“Turkish stocks continue benefiting from inflows to emerging markets as the rebound in oil prices and good data from China helped temper concerns about global growth,” said Burak Demircioglu, a trader at Burgan Yatirim Menkul Degerler in Istanbul. “The main theme for Turkish stocks is whether investors will continue putting money into emerging markets funds or not.”

Above Average

The Borsa 100 increased to 85,696.67 at close in Istanbul, the strongest level since May 22. Akbank advanced 3.8 percent to 8.43 liras, the highest level in 11 months, as traders exchanged about 33 million shares, more than 30 percent above the 20-day intraday average. Eregli Demir ve Celik Fabrikalari TAS, the nation’s biggest steelmaker by market value, rose 2.7 percent to 4.96 liras, record high.

The yield on 10-year government bonds declined 11 basis points to 9.57 percent.

The Turkish lira depreciated against the dollar for a second day to trade 0.4 percent lower at 2.8460. Brent crude’s recent advance to more than a four month high has weighed on the currency as Turkey imports more than 90 percent of its oil.

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