Istanbul bourse gains 4 pct after central bank move

ISTANBUL (Reuters) – Turkish shares jumped nearly 4 percent yesterday and bonds also gained as the lira’s resilience in the face of central bank intervention was seen as illustrating foreign investor confidence in the country. The lira closed at 1.3310 to the dollar on the interbank market from 1.3370 on Wednesday, recovering back toward the level seen before the central bank bought some $5 billion in direct intervention yesterday. «The central bank’s intervention yesterday was an important indicator and lifted sentiment. Despite it buying $5 billion from the market, the lira held at the same levels,» said Koc Portfolio fund manager Ersoy Erkazanci. The main Istanbul share index closed 3.56 percent higher at 45,361.34, building on a gain of 0.68 percent a day earlier. The index’s current record high of 45,784 was reached on January 26. Trading volume climbed 33.7 percent to 1.86 billion lira ($1.4 billion) from 1.39 billion a day earlier. Bankers said bond yields fell as the increased lira liquidity flowed into the bond market. Yields on the benchmark September 5, 2007 bond fell to 13.63 percent from 13.89 percent on Wednesday. Analysts said the «non-aggressive» testimony on Wednesday from new US Federal Reserve Chairman Ben Bernanke helped calm market nerves. Investors were also reassured by the calm reaction to Turkey’s higher-than-expected current account deficit figures on Wednesday.

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