Turkish stocks higher after Russia 'reset'

ANKARA (AA) – Turkish stocks rose 1.38 percent Thursday as investors rushed to buy shares in tourism-sector firms amid an ongoing normalization of relations between Moscow and Ankara.

Shares in the Borsa Istanbul national 100-share index ended the day up with 1,077.9 points at 79,033.57.

Turkish banking stocks were up 1.99 percent following a 1.78 percent fall Tuesday. Shares in the tourism sector were also up 5.51 percent with hopes more Russian tourists will return to Turkey.

Ties between Moscow and Ankara entered a new phase following a meeting between President Recep Tayyip Erdogan and his counterpart Vladimir Putin on Tuesday.

The mining sector lost 1.47 percent on Thursday when the total trading volume was 3.4 billion Turkish liras ($1.15 billion).

Shares in Borsa Istanbul's most actively traded stock, Garanti Bank, rose 2.87 percent to 7.89 lira, while heavily-traded Turkish Airlines, THYAO, shares rose 1.78 percent to 5.71 lira.

The Borsa Istanbul Gold Exchange index lost 0.63 percent in value Thursday, with gold trading at 128,250 Turkish liras per kilogram, up 127,739 at Wednesday's close.

The Turkish lira fell to 2.9550 against the U.S. dollar, while the benchmark 10-year government bond yield fell to 9.39 percent from 9.40 percent.

On Thursday, state-run Halkbank cut home loan rates to under one percent per month following another state lender, Ziraat, on Wednesday as Erdogan on Wednesday urged lenders to reduce interest rates in order to boost growth.

Interest-rate discussions dominated Turkish newspapers Thursday after lenders started to drop their rates in order to support the country's growth after the July 15 coup bid.

Mehmet Ali Akben, head of Turkey’s Banking Regulation and Supervision Agency, warned the banking sector against recalling bank loans without “sufficient reason”.

Akben told Anadolu Agency on Thursday: "We absolutely do not allow banks to recall loans on the pretext of seeking extra profit.

"We will take all necessary steps against any unfair practices in the sector. People can complain to us by calling our hotline for any wrongdoing in the sector and giving us the bank's name."

Turkey’s current account deficit stood at $4.94 billion in June, up more than $1.7 billion year-on-year due to the decline in income from tourism and an increase in imports, the Central Bank said on Thursday.

The 12-month rolling deficit rose to $29.4 billion, up from $27.7 billion in May. A fall in the services surplus and an increase in the deficit in goods trade and primary income was the main reason for the increase, the bank said.