ISTANBUL: Turkish stocks rose for a second day, lifted by a rally in Dogan Yayin shares after the top administrative court overturned tax court rulings against its Dogan TV unit worth 713.3 million lira ($451.5 million).
Turkish stocks gained 2.5 percent on Friday after a sell-off prompted by inflation fears earlier last week tempted bargain hunters back into the market.
Istanbul's main share index climbed 0.7 percent higher to 65,823.13 by 0829 GMT.
"The optimism in the equity and currency markets on Friday raised questions as to whether we came to an end in the sell-off in Turkish markets. But we need to see the sell-off ending in the bond market to confirm this," said Fatih Keresteci, a strategist at HSBC Bank in Istanbul.
"We foresee the lira will appreciate and the benchmark bond yield to fall toward 8.3 percent today."
The lira strengthened to 1.5746 per dollar by 0843 GMT, after closing at 1.5935 per dollar on Friday.
Shares in Dogan Yayin, Turkey's biggest media group, rose 3.4 percent to 2.13 lira following the Council of State ruling.
"This decision will have a positive impact on the stock today. It sets a benchmark for the company's other court cases. The process may linger for a while, the tax court may appeal again, but for now this is positive," said Kenan Turan, an analyst at Tera Brokers.
Separately, HSBC raised its price estimate for Dogan Yayin to 2.16 lira from 1.65 lira.
The yield on the benchmark Nov. 7, 2012 bond fell to 8.35 percent, from a close of 8.41 percent on Friday. Bonds yields rose as high as 8.50 percent, a seven-month high, last week on concerns about looming inflation and the central bank's risky new policy drift.
Data on Thursday showed annual consumer inflation in January fell to a more than 40-year low of 4.9 percent, while on a monthly basis it stood at 0.41 percent.
But an unexpectedly high monthly rise in producer prices took markets by surprise and fed worries that the central bank's surprise move to cut interest rates in the past two months will lead to higher inflation.
The bank has also raised required reserve ratios as part of a policy shift aimed at curbing inflows of hot money to Turkey, moderating domestic credit growth.
Opinions on whether the bank will cut rates for a third time on Feb. 15 are mixed, but another reduction would further weaken the risk premium for investing in the lira and heighten anxiety.
Koc Holding, the nation's biggest company, rose 0.8 percent to 7.22 lira. HSBC raised its price estimate to 8.15 lira from 6 lira previously.
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