Turkish assets clawed some of the previous day's heavy losses on Tuesday as investor concern about anti-government protests across the country appeared to ease.
Attention was focused on a morning meeting between President Abdullah Gul and Deputy Prime Minister Bulent Arinc, who was subsequently set to hold a news conference expected to focus on the unrest.
The main Istanbul share index was up 3.87 percent at 79,965 points at 0716 GMT, having closed 10.47 percent lower on Monday.
The lira strengthened to 1.8804 against the dollar from 1.8892 late on Monday, when it hit its weakest level since January 2012.
The two-year benchmark bond yield fell to 6.36 percent from 6.47 percent on Monday.
Protesters clashed with Turkish riot police overnight and a union federation began a two-day strike on Tuesday as the demonstrations in which two people have died stretched into a fifth day.