UPDATE 1-Turkish markets steady as economy worries ease

(Adds closing prices)

ISTANBUL, Feb 8 (Reuters) - The Turkish lira, stocks and bonds nudged higher on Friday, helped by an easing of worries about the global economy and a rise in U.S. stocks but traders said it should not be seen as the start of a rally. The lira IYIX= ended at 1.2040 to the dollar on the interbank market, up slightly from Thursday's close of 1.2085, but slid further to around 1.2140 in after-hours trade.

The main stock exchange index .XU100 ended up 0.22 percent at 41,957.86 points, off the day's highs. European and U.S. stocks also rose on Friday.

A banker said short-term expectations on the global economy had improved, but investors were still cautious and wanted to see new positive data.

Bonds also edged higher as the yield on the Oct. 7, 2009 benchmark TRTSYSUM=IS eased to 16.620 percent from the previous day's 16.63 percent.

Turkish assets are particularly sensitive to shifts in global appetite as Turkey has a sizeable current account deficit and large amounts of foreign portfolio investment both in high-yielding lira bonds and the stock market.

Worse-than-expected industrial production data announced on Friday may hurt investor sentiment. The data showed industrial production fell 1.4 percent year-on-year in December, versus a median forecast of 4.2 percent in a Reuters poll.

Analysts said the correlation between the lira and the equity markets has been decreasing substantially, contributing to the good lira performance lately. They said this also suggests that if the equity markets at some point stage a sizeable rally, the lira performance may not follow.

The currency is now nearly 3 percent weaker, while Turkish stocks fell 30 percent, since end-2007 on fears of a recession in the world economy.