UPDATE 1-Turkish banks lead shares higher on strong Q3 results

ISTANBUL, Nov 11 (Reuters) - Stronger banks lifted the Turkish share market on Wednesday as investors weighed up strong third-quarter corporate results, while a positive trend in global risk appetite underpinned sentiment. Analysts said the movement in the Turkish markets was a reflection of the risk trade, and a weakening dollar supported inflows into equities and emerging markets. The main stock exchange index rose 1.03 percent to 48,630 points by 1348 GMT, in line with the MSCI index of emerging markets which was 1.16 percent higher. The gains were driven by the banking index which rose 2.35 percent. Yapi Kredi Bank, up 1.92 percent, was scheduled to release its third-quarter figures on Wednesday, along with refiner Tupras, brewer Anadolu Efes and Turkish Airlines. Dealers said the trend in local currency and bond markets was being driven by moves in the dollar/euro exchange rate. The lira firmed 0.4 percent to 1.4670 against the dollar on the interbank market from 1.4730 on Tuesday. The yield on the Aug. 3, 2011 benchmark bond fell slightly to 8.58 percent from 8.60 percent a day earlier. Turkish capacity utilisation rose 1.7 percentage points on the month to 71.8 percent in October, the Turkish Statistics Institute said on Wednesday. "The stronger capacity utilisation data seems to have erased any hopes that the monetary policy committee may cut by 50 basis points again, or rather we didn't see a bad reading which could have encouraged the committee to cut by 50 basis points," said Nicholas Kennedy, financial advisor at 4Cast. The Turkish Central Bank cut its benchmark interest rate to a record low last month of 6.75 percent. Yields had dropped to below 8 percent on expectations of further, though more moderate, rate cuts. However fears over high state borrowing have since curbed investor appetite. "Primary dealers seem keen to keep yields higher into the auctions next week but market should be able to rally afterwards, assuming core market tone is maintained," said Kennedy. The Turkish Treasury will hold auctions for a 13-month lira-denominated coupon bond, maturing Dec. 8, 2010, a 21-month lira denominated zero coupon bond, maturing on Aug. 3, 2011 and a 5-year CPI indexed government bond, maturing on Oct. 1, 2014. Among shares in focus, gold miner Koza fell 3.46 percent to 4.75 lira and was the most actively traded share after it announced a net profit of 15.2 million lira in the third quarter, compared with a loss of 2.9 million a year earlier. Tekfen Holding, a Turkish construction and fertiliser firm, jumped 4.33 percent after it saw its net profit more than double expectations in the third quarter at 44.1 million lira ($30 million). Idas jumped 5.16 percent to 4.48 lira after announcing it has begun partnership talks with Sweden's Hilding Anders, Europe's biggest bedmaker. (Reporting by Selcuk Gokoluk; Writing by Daren Butler; Editing by Andy Bruce) Keywords: MARKETS TURKEY/ ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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