ECONOMY

Turkish markets end stronger, shrug off EU setback over trade with Cyprus

ISTANBUL (Reuters) – Turkish markets closed firmer yesterday, shrugging off European Union president Finland’s failure to resolve a trade row between Turkey and Cyprus that threatens to derail Ankara’s bid to join the EU. The EU says Turkey must open its ports to shipping from EU member Cyprus or face unspecified consequences to its EU bid. The EU’s enlargement commissioner, Olli Rehn, said after the markets had closed that Turkey’s accession talks would not be frozen but continue more slowly. The main stock exchange index rose 1.75 percent to 38,238.57 points. The lira firmed slightly to 1.4670 on the interbank market from Friday’s close of 1.4720. Traders said markets had already priced in Turkey’s EU woes, adding that they benefited yesterday from a weaker dollar and gains on global bourses backed by robust commodity prices. «Nobody was expecting a positive result from these talks (in Finland). It was clear that Turkey would not open its ports and the market has settled after some fluctuations today,» one banker said. Finland said yesterday Turkey and Cyprus were too far apart for a realistic prospect of success during its term at the EU helm, which ends on December 31. Bonds also strengthened yesterday, with the August 13, 2008 benchmark bond yielding 21.30 percent, down from 21.56 percent on Friday. Investors will take their cue from the December borrowing program due to be disclosed on Friday and from monthly inflation data due to be published on December 4. The central bank purchased $29 million at an average rate of 1.4669 in its daily foreign exchange buying auctions. The bank has purchased $321.1 million so far this month in a move intended to strengthen its foreign exchange reserves.