ISTANBUL, Nov 5 (Reuters) - Turkish markets weakened on
Monday in line with global markets and after
higher-than-expected inflation, while investors were also
watching for news from key U.S.-Turkey talks later in the day.
Prime Minister Tayyip Erdogan and President George W. Bush
were scheduled to meet in Washington at 1815 GMT which analysts
say will be key to Ankara's decision on whether to launch a
military incursion against Kurdish rebels in northern Iraq.
The lira <IYIX=> closed at 1.1890 against the dollar in
interbank trade, weakening from 1.1790 on Friday after hitting a
fresh six-year high last week.
"The primary reason for the fall in the stock market was
foreign (markets). The fall in European markets was more than 1
percent. The Turkish market fell a bit more because the
Erdogan-Bush meeting made investors tense," said Yunus Kaya from
Gedik Investment.
The main share index <.XU100> fell 1.39 percent to
56,064.31, extending a decline of 0.9 percent on Friday.
Going against the downward trend, Migros <MIGRS.IS> stock
rose 0.5 percent to 21.1 lira as sources said a deadline had
arrived for preliminary bids for the supermarket chain, put up
for sale by conglomerate Koc Holding <KCHOL.IS>.
The yield on the Aug. 5, 2009 <0#TRTSYSUM=IS> benchmark bond
rose to 16.35 percent from 16.27 percent on Friday.
After Turkish markets closed on Friday data showed October
inflation came in at 1.81 percent month-on-month, compared with
a market expectation of 1.20 percent. Analysts said the data
could reduce rate cut expectations for November.
But the Turkish central bank said on Monday it expected
inflation to return to a falling trend after the current rise,
adding that the effects of last year's sharp rate hikes
continued to be felt.
The bank hiked benchmark borrowing rates 425 basis points
last year amid rising inflation and started easing earlier than
expected in September and since then has cut rates to 16.75
percent with a combined 75 basis point reduction.
On Sunday Kurdish rebels released eight Turkish soldiers
captured in an ambush last month, a move that could ease
pressure on the government to launch an incursion.
Iraqi leaders said on Saturday they were ready to hunt down
leaders of the Kurdistan Workers Party (PKK) in northern Iraq
responsible for cross-border attacks in Turkey.
(Reporting by Tolgahan Ozkan; Writing by Daren Butler)
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