UPDATE 1-Turkey markets rise after strong U.S. retail data

(Updates with closing figures, new comment)

ISTANBUL, Feb 13 (Reuters) - Turkish markets rose on Wednesday as better-than-expected U.S. retail sales and easing fears of a recession in the world's biggest economy improved investor sentiment.

The lira <IYIX=> strengthened 1.2 percent against the dollar to 1.2000 on the interbank market from a close of 1.2145 on Wednesday. It was still 2.8 percent weaker than its end-2007 level.

Better-than-expected United States retail sales data set Wall Street on track for a strong open and wiped out stock losses in Europe, easing some investor concerns about the U.S. economy falling into recession.

"Yesterday's rally continued into today. The U.S. retail data backed the data, and important resistance levels were surpassed...Investor confidence improved a little," said Meksa Investment analyst Burak Urucu.

The rally in the markets may continue on Thursday, he said.

After a 5.3 percent surge on Tuesday, the ISE National-100 index .XU100 rose 2.79 percent to 44,752.46 points on Wednesday, underperforming the emerging markets index .MSCIEF, which was up 0.91 percent.

Turkish bonds also firmed as the yield on the Oct. 7, 2009 benchmark <TRTSYSUM=IS> bond fell to 16.79 percent from 16.84 percent a day earlier.

Bond investors were focused on Thursday's meeting of the central bank's Monetary Policy Committee, which is expected to cut the benchmark borrowing rate by 25 basis points to 15.25 percent, according to a Reuters poll last week.