Turkish markets gain for sixth day on upbeat global sentiment

The main share index finished the morning session up 3.0 percent at 34,729.90, on track to reach its highest closing level this year and outperforming the MSCI emerging equities index, which rose 1.24 percent.

Stocks worldwide reached 2009 highs ahead of the release by the U.S. Treasury of the results of 'stress tests' at major banks. Leaked reports show about half won't need more capital, spurring gains in banking shares around the globe. Â

In Turkey, banks profits climbed 33 percent in the first quarter to 5.2 billion lira, Tevfik Bilgin, the chief of banking regulator BDDK, told CNBC-e television on Thursday.

Turkish banks have boosted income by keeping interest rates on loans high while slashing what they pay on deposits after the Central Bank reduced its benchmark rates by a total 700 basis points since November.

Garanti Bank, the most heavily traded stock, jumped 5 percent to 3.78 lira. Isbank, the biggest publicly traded lender, rose 4.55 percent to 5.06 lira.

The yield on the busiest Feb. 2, 2011, bond fell to 11.59 percent, a new historic low, from 11.80 percent on Wednesday.

Turkey's credit default swaps (CDS), the cost of protecting against debt defaults, gained as its 5-year CDS down to 255.5 bps compared with 270.0 bps in the previous session. This is the lowest since June 2008, according to consultancy CMA DataVision.

'Turkish markets' relative out performance during the crisis is providing some reassurance that this will facilitate the economy's quicker bounce back,' Timothy Ash, an analyst at Royal Bank of Scotland, wrote in a note.

'Back-stopping is provided by the hope of an IMF programme, and the still-substantial scope for rate cuts is also helping.'

The government is in talks with the International Monetary Fund on a lending pact that could be worth as much as $45 billion. Turkey's last IMF accord expired last May and talks with the Washington-based fund have yet to produce agreement.

The lira gained 1.2 percent on the interbank market to 1.5465 against the dollar from Wednesday's close of 1.564.