"IG Index has recently added the Turkey 30 Index. It is based on ISE-30 Future on the Turkish Derivatives Exchange. Are you able to add a suitable chart to the library for this index?

"You last discussed Turkey on the 6th May and again on the 4th June 2010. I would be interested in your latest appraisal of the charts, given that they appear to be close to all time highs"

Eoin Treacy's view Thank you for this informative email. I have added the ISE National 30 Index to the Chart Library which should correspond with the product offered by IG Index. This article by Steve Bryant for Bloomberg may also be of interest:

Economic growth has slowed since Turkey emerged from recession in the second quarter of last year. It was just 0.1 percent in the first quarter. Manufacturing confidence fell for a second month in June, after rising for the previous five months.

Inflation has also slowed, with the rate dropping nearly two percentage points to 8.4 percent in the two months through June. It may finish the year "above but close" to the bank's 6.5 percent goal, Yilmaz said July 8.

European Central Bank President Jean-Claude Trichet said July 8 he expects "price developments to remain moderate" and ECB policy makers left the key interest rate unchanged at 1 percent.

"There's been very significant improvement in inflation," said Yarkin Cebeci, an economist at JPMorgan Chase & Co. in Istanbul. Cebeci, who had predicted the bank would raise rates in April, says he expects the central bank to wait until the second half of next year.

The size of Turkey's domestic market cushions it to some extent from the effects of the European debt crisis, said Neil Shearing of Capital Economics Ltd. in London. "It's not absolutely critical for Turkey as it is for, say, the Czech Republic and Hungary," which have much smaller populations.

Never Cheaper
Credit has never been cheaper in Turkey after the central bank lowered rates 13 times from a high of 16.75 percent in October 2008, boosting borrowing by consumers. Real interest rates are negative, with inflation at 8.4 percent in June.

This additional article by Landon Thomas for the New York Times "Turning East, Turkey Asserts Economic Power" carries some additional points.

As I pointed out on both occasions you mention above, the primary consistency characteristic for Turkey's market has been the progression of rising reaction lows. While the Index lost momentum somewhat as it approached the 2007 high, it has held above the 200-day MA and continued to post new highs. It is now testing the April high near 60,000 and a sustained move below 50,000 would be required to question the primary consistency of the medium-term uptrend.

Negative real interest rates have helped to fuel the Turkish stock market's impressive advance. Banks and financials have benefitted from loose monetary conditions and dominate the Index. The current environment is highly stimulative and it will be interesting to note how the market reacts when conditions become less accommodative. The ISE National Financials Index appears to be returning to a position of outperformance relative to the wider market. In absolute terms it would need to sustain a move below 80,000 to question the consistency of the advance.

The Turkish Lira has strengthened somewhat against the Euro over the last few months, but the Euro's 8-year progression of higher reaction lows against the currency remain in place and a sustained move below TRY1.8 would be required to indicate medium-term Lira dominance. The Lira remains close to the centre of the 8-year, TRY1.2 to 1.8, range against the US Dollar. The greenback encountered at least short-term resistance in June near TRY1.6 and a sustained move above that level would be required to question scope for some further lower to lateral ranging. .

Turkish 5yr local currency bond yields continue to compress. The rate broke below 9.5% in early June and encountered resistance at that level a few weeks later. A sustained move back above 9.5% would now be required to question short-term demand dominance. The country's CDS spread remains steady with a mild downward bias in the region of 170 basis points.