Turkish equities have posted blistering gains this summer as an economic policy overhaul and fears about a fresh flare-up in inflation draw local savers and foreign investors into the market. 

The benchmark Bist 100 index has soared 46 per cent since the end of May. The gauge gained 14 per cent in US dollar terms over that period despite a huge fall in the lira, outpacing a rise of 9 per cent for MSCI’s emerging markets index, FactSet data shows. 

The rally comes at a time when Turkey’s $900bn economy is in flux. A wave of stimulus measures unleashed by President Recep Tayyip Erdo?an ahead of May’s election is fuelling a fresh bout of inflation even as the country’s new economic management team attempts to restore “rational” policymaking. The two forces are working in tandem to make Turkish equities look more appealing to local savers and some foreign fund managers.