Narrower current account gap boosts Turkish assets
ISTANBUL Aug 15 (Reuters) - Turkish shares edged up and the lira firmed on Thursday as data showing a narrower-than-expected current account deficit provided some relief for investors worried about tightening global liquidity.
The deficit shrank to $4.445 billion in June from a revised $7.30 billion in May, central bank data showed, below a Reuters poll forecast for a deficit of $5.1 billion.
The main Istanbul share index rose above 76,000 points following the data release but later pared gains to trade up 0.15 percent at 75,585.89 points by 0735 GMT. It was outperforming the broader emerging markets index, which was down 0.31 percent.
The lira strengthened slightly against the dollar, to 1.9295 from 1.9323 late on Wednesday.
The current account deficit, Turkey's main economic weakness, makes it susceptible to capital outflows when central banks in developed economies start to tighten liquidity.
Expectations that the U.S. Federal Reserve will cut its stimulus programme sooner rather than later has dampened appetite for emerging market assets in recent weeks.
Standard Bank economist Timothy Ash said that, despite the narrowing, the current account gap remained very significant.
"Over $160 billion in short-term external debt falls due over the next year, putting the gross external financing requirement up at around the $210 billion mark, huge both by historical and peer group comparisons," he said.
The yield on Turkey's 10-year bond eased to 9.12 percent from 9.23 percent at Wednesday's close.
Banks continued to lead the share index higher following a strong expansion in the sector's loan book. Reuters' index of Turkish banking stocks has risen 2.37 percent in the last month. (Editing by Nick Tattersall, John Stonestreet)
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