(Adds quotes, shares, bonds)
ISTANBUL, July 23 Turkish shares rose to their
highest since May 2013 on Wednesday and the lira hit its
strongest since mid-June as risk aversion eased and after the
economy minister forecast Turkey's current deficit would fall by
more than expected this year.
At 0848 GMT, the lira stood at 2.0942 against the U.S.
currency, just off a high for the morning of 2.0933, its
strongest since June 11. It stood at 2.1055 late on Tuesday.
"Global risk sentiment continued to strengthen, with
slightly lower U.S. core CPI strengthening expectations that the
Fed will not hurry to raise rates," TEB BNP Paribas strategist
Erkin Isik said in a morning note.
"The market will be looking for clues on the
(Turkish)central bank's next action from Governor (Erdem)
Basci was addressing parliament's planning and budget
commission in a closed door meeting on Wednesday.
The main Istanbul share index rose 0.6 percent to
83,027 points, slightly outperforming the emerging markets index
which rose 0.44 percent.
Gedik Investment said the stronger lira and growing risk
appetite was driving the stock market higher, forecasting trade
in a range of 84,000-85,000 after the break above 83,000.
The benchmark 10-year government bond yield
dipped to 8.87 percent from a close of 8.92 percent on Tuesday.
Economy Minister Nihat Zeybekci's comments late on Tuesday
about the current account deficit - seen as the economy's main
weakness - were likely to boost optimism about the economic
outlook. He said deficit will end the year below $50 billion at
around 5.5 percent of gross domestic product if growth in
exports, output and employment continues.
Among stocks in focus was Akbank, up 0.6 percent,
which was expected to announce second-quarter results later.
Leading mobile phone operator Turkcell, unchanged at
13.2 lira, is also due to announce results after the close.
(Writing by Daren Butler; Editing by Catherine Evans)