ANKARA (Reuters) – Turkey’s financial markets closed mixed yesterday, with stocks and government bonds losing ground while the lira rose after Foreign Minister Abdullah Gul was named the dominant Justice and Development Party’s candidate for president. The lira reversed course to touch a new 11-month high while domestic government bonds had their losses trimmed, indicating foreign investors remain committed to the country. With Gul chosen to stand for president, the Justice and Development Party (AKP) keeps Turkish Prime Minister Recep Tayyip Erdogan, its strongest asset, at its helm ahead of general elections later this year. «The fact that Erdogan will not be a candidate is positive, and at this level Gul’s candidacy is not negative, but controversies can continue,» said Kadir Tezeller, strategist at Seker Investment in Istanbul. Foreign investors hold great sway in Turkey’s markets with an estimated 70 percent ownership of the stock market’s freely tradeable securities and a fast-rising share of domestic government debt holdings. Turkey’s main stock exchange index closed down 340.92 points, a loss of 0.72 percent on the day to 47,014.90. «As long as global sentiment is positive, this sentiment will prevail in Turkey. Therefore the flow of foreign cash into the country will continue. I don’t see a major political risk in the short term,» said Deniz Yucel, equity research analyst at Fortis Investment in Istanbul. «Locals are still cautious versus what foreigners think. It is like two different groups of investors fighting against each other,» Yucel said. Investors hope Erdogan’s decision to remain head of the AKP will enable single-party rule to continue in Turkey after the election. «By maintaining his position in government, many investors believe that would be the best scenario for continued one-party rule. It was very positive for the last five years,» said Ayse Colak, CFA and director of research at Tera Stockbrokers in Istanbul.