Azernews.Az

By Bloomberg

Turkish stocks ended the worst rout in 20 months and the lira strengthened as European markets bounced and investors turned their attention to economic indicators for signs of a pick up.

The benchmark Borsa Istanbul 100 Index rose 2.1 percent to 72,859.76 at midday break, after a 7.7 percent drop in the prior six days drove it into a bear market. That was the biggest slide since a corruption probe against the government came to light in December 2013. The lira gained 0.6 percent to 2.9262 per dollar.

Investors have battered the nation’s assets as more than two months of political deadlock and security concerns outweighed the benefit of the sliding price of oil for Turkey, a net importer of fuel. Real sector confidence data are due for release on Tuesday, along with capacity utilization figures, which capture the overall slack in the economy and had the strongest result since December 2013 in July.

“Better-than-expected results could indicate a slight recovery in economic activity during the third quarter of the year,” analysts including Ozlem Derici at Deniz Investment in Istanbul said in an e-mailed report. “We expect an uptick in early trading this morning as yesterday’s global equity rout should pave the way for a small bounce in markets across the board.”

The lira remains about 2.6 percent away from a record low as the failure of coalition talks forced President Recep Tayyip Erdogan to call new elections. Turks will head to the ballot box again after an inconclusive vote in June saw the ruling AK Party that Erdogan co-founded lose its parliamentary majority for the first time since 2002.

The instability is having repercussions on the economy, with Moody’s Investors Service predicting economic growth will slow to 2.5 percent in 2015 from 2.9 percent last year.

Should the data today show that deteriorating financial conditions have put downward pressure on economic activity, the central bank "may be less inclined toward tightening policy stance aggressively," Erkin Isik, a strategist at Turk Ekonomi Bankasi AS said by e-mail.