UPDATE 1-Turkish lira recovers, Akbank leads shares higher
* Turkish lira, shares up after sell-off on Syria tensions
* Shares in Akbank rise * Bonds flat
(Adds quotes, closing prices)
By Seltem Iyigun
ISTANBUL, Oct 5 (Reuters) - The Turkish lira firmed on Friday, a day after hitting its weakest level since mid-September following attacks on the Syrian border, while Akbank shares rose on bullish expectations for the bank's second-half performance.
By 1433 GMT, the lira had firmed to 1.7946 against the dollar , from 1.7985 late on Thursday.
It had hit 1.8110 on Thursday, its weakest since mid-September, after Turkish artillery hit targets near the Syrian border in retaliation for Syrian shelling, which killed five Turkish civilians on Wednesday.
Investors' anxiety eased after Turkey said Syria had apologised for the strike and such an incident would not be repeated.
"The initial response from the Turkish government looked to engage the United Nations, which was a comfort for the market. As regards price action today, emerging currencies have generally been bullish," said Roderick Nghoto, EMEA FX strategist at RBS.
"I do not ascribe current lira price action to Turkey specific news today."
Against its euro-dollar basket , the lira eased to 2.0700 from 2.0673. Following the incident with Syria, it hit its weakest since Sept. 18 at 2.0759 on Thursday.
Turkey's main share index closed up 0.7 percent at 67,383 points, in line with a 0.6 percent rise in the emerging markets index .
The market was led by banking shares , which rose 1.6 percent.
"On a weekly basis, shares rose 1.8 percent and outperformed the emerging markets index. Although parliament has approved sending soldiers to foreign countries if necessary, investors viewed that, in the short-term, geopolitical risks are not too important," said Erdem Kayli, equity analyst at Tekstil Invest, adding that banking shares had driven the week's gains.
Shares in lender Akbank rose 2.39 percent to 7.72 lira on Friday.
"Expectations for the final quarter financial results of Akbank are quite positive. For the second half of the year, we expect the bank to have a return on equity ratio of around 17 percent," said Recep Demir, equity analyst at Garanti Securities.
The yield on the two-year benchmark bond closed at 7.57 percent, down from a previous close of 7.61 percent. It had jumped as high as 7.75 percent on Thursday.
(Writing by Seltem Iyigun; Editing by Robin Pomeroy)
Keywords: MARKETS TURKEY/