Turkish stocks rise but lira falls on positive Commission report

ISTANBUL (Reuters) – Turkish shares rose but the lira weakened yesterday after a European Commission report recommended starting accession talks with Ankara while outlining a set of conditions for the negotiations. Financial markets had widely expected the recommendation for talks in the Commission’s progress report after the Turkish government’s drive to push through key political reforms. The main stock index finished at 22,287.12 points, a rise of 3.12 percent. Shares initially lost some of the ground from the morning session’s gains when the report was released. Equities have soared 41 percent since May 18, boosted by hopes for Turkey’s EU membership. «Some conditions were expected. In general, the stock market is upbeat,» said Merih Yildirim, fund manager at Koc Portfolio. The lira lost some ground on the interbank market, weakening to 1,505,000 against the dollar from 1,501,000 earlier in the day. It traded as low as 1,511,000 after the report. «The passing of the progress report in this form is a strong positive for Turkey,» said Simon Quijano-Evans at HVB Group in Vienna. «What’s important is that the Commission has said Turkey has ‘sufficiently fulfilled’ the criteria for talks. «There may be some selling of the fact, but this will be short-lived.» Markets dipped following the release of the EU executive body’s report. Among the conditions was a call for negotiations to be suspended if Turkey backtracks on human rights.