Turkish assets rebound, inflation boosts lira

ISTANBUL, July 4 (Reuters) - Turkish assets gained on Friday, with foreign cash inflows boosting Turkish banking stocks while better-than-expected June inflation data supported the lira.

The Turkish currency <IYIX=> closed 1.5 percent firmer on the day at 1.2345 against the dollar from the previous day's close of 1.2535.

The lira had firmed to 1.2445 in after hours trade on Thursday following lower-than-expected June inflation figures.

"The inflation was better than expected so there's new interest in the lira today and we saw some buying from London names," said Omer Unveren, a foreign exchange trader at Finansbank.

Inflation scares have unsettled investors with the last central bank's external survey forecasting year-end inflation of 10.63 percent, but consumer prices fell 0.36 percent in June, the Turkish Statistics Institute announced on Friday after the markets closed.

Istanbul's main Istanbul stock index .XU100 rose 1.12 percent to 34,300.37 points on Friday after suffering heavy losses earlier in the week.

Turkish stocks lost more than 5 percent on Tuesday after the detentions of 21 secularists, including former military generals and a leading businessman, suspected of membership in an ultra-nationalist gang known as Ergenekon.

"Turkish stocks took a slightly different course today from European stocks as we were subjected to a lot of selling over the last couple days due to worries over the closure case and the Ergenekon arrests," said Muhittin Kuley, head of research at Orion Invest in Istanbul.

The Ergenekon gang has been accused of plotting a coup against the ruling AK Party.