* Turkish assets rebound from Monday losses
* Inflation spike won't change easing expectations
ISTANBUL, Nov 4 (Reuters) - Turkish markets rose on Wednesday, shrugging off the previous day's higher-than-expected October inflation data as a blip that will not reverse the disinflation and monetary easing trends.
Consumer prices rose 2.41 percent month-on-month in October, compared with a forecast rise of 1.80 percent, for a year-on-year rise of 5.08 percent, the Turkish Statistics Institute said late on Tuesday.
"Higher-than-expected October inflation readings are not a concern as markets see it as a blip rather than a change in trend," Is Investment said in a research note.
The Turkish Central Bank is expected to undershoot its 7.5 percent inflation target this year, and the market expects further easing, although at a more moderate pace.
The lira firmed 0.8 percent to close at 1.4935 to the dollar from the previous day's 1.5060. The currency has made only slim gains this year, and has slipped from a 2009 high of 1.4389 in mid-October.
The yield on the benchmark Aug. 3, 2011, bond fell slightly to 8.86 percent from 8.88 percent. Yields have risen significantly in recent weeks from levels of around 7.59 percent seen in early October, due to anxieties about high government borrowing.
Trading on the main stock index was choppy, but it remained in positive territory most of the day and closed up 2.04 percent to 47,281, after weakening on Tuesday. It slightly underperformed the MSCI index of emerging markets, which jumped 2.62 percent.
Analysts said it was difficult to discern any strong trend in the forthcoming period.
"It is obvious that insecurity and cautiousness are dominant in the market now after a rally of seven months. The real-sector and financial sector haven't developed in tandem and now we are seeing profit-taking, and people want to see palpable signs of economic recovery," said Ozlem Bayraktar, economist at Unicorn Capital.
"In the following months the rally won't continue, although I also don't see strong profit-taking in Turkey. I think a wait-and-see mood wil prevail with range-bound trading."
State-run Turkish lender Halkbank closed up 2.15 percent after it posted higher-than-expected third-quarter net profit of 420.2 million lira ($279 million), helped by higher net interest income.
"The bank continued to gain market share from competition. The limited margin erosion was due to higher margin SME lending and switch to money market funding," Oyak Securities said in a research note.
Financials in Turkey are facing margin erosion as competition forces them to bring down loan rates in line with steep cuts to the overnight borrowing rate by the central bank.
Islamic lender Bank Asya was among the highest gainers on the Istanbul index, closing up 6.85 percent at 3.12 lira, and after gaining as much as 8 percent in intra-day trade.
Bank Asya chief executive Unal Kabaca told Reuters in an interview he expects deposit growth of 50 percent in 2009 and cash loan growth of 30 percent, higher than previously targetted .
The bank has boosted its market share in cash-lending this year amidst extreme caution by other Turkish lenders, and aims to boost both cash loans and deposits by 25 percent respectively in 2010, Kabaca added.
Turkey's biggest mobile phone operator Turkcell, which will announce its third quarter results on Wednesday night, closed up 5.1 percent. (Reporting by Selcuk Gokoluk; editing by Ron Askew)