Turkish assets lose early gains as US futures slide
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ISTANBUL - Turkish assets failed to hold early session gains on Monday as a sharp drop in U.S. futures weighed on sentiment, distracting market attention from a visit by U.S. President Barack Obama and hopes of improved ties. (UPDATED)
The lira, lifted last week by news that Turkey had and the International Monetary Fund had agreed in principle to resume talks on a loan deal, closed at 1.5730 to the dollar, up slightly from Friday's close of 1.5910.
Earlier on Monday it had touched an almost three-month high trading at around 1.5590 to the dollar.
Istanbul's main share index retreated from early gains of almost 2 percent to close flat at 26,650.66 points, underperforming the MSCI index of emerging market stocks which gained 0.86 percent.
'A sharp drop in U.S. futures led stocks to pare gains by the afternoon,' said an Istanbul trader.
He also said Sun Microsystems's rejection of an offer from IBM had soured market sentiment.
Shares in conglomerate Sabanci Holding fell 0.63 percent to 3.16 lira after it posted results in line with expectations and a decline in quarterly revenue.
OBAMA VISIT
Analysts at Is Invest said in a research note any positive reinforcement of U.S. and Turkish ties by President Barack Obama, who arrived in Turkey on Sunday, could help draw foreign investor interest back to the country, after Turkish assets suffered a severe sell-off during 2008.
Obama told Turkey's President Abdullah Gul on Monday: 'I am trying to make a statement about the importance of Turkey not just to the United States but to the world.'
'It is a member of NATO, and it is also a majority-Muslim nation, unique in that position and as a consequence has insights into a whole host of regional and strategic challenges we may face,' he said.
The expected visit of IMF delegates to Turkey this month has also helped support more positive sentiment on the country.
Talks between Ankara and the IMF were suspended in January over discord on issues such as unregistered income, the creation of a tax authority and government spending.
The yield on the benchmark bond maturing on Nov. 3, 2010, fell to 13.50 percent from the previous close of 13.56 percent.
Government officials have said an IMF stand-by loan accord could be worth as much as $25 billion to help Turkey to cover its financing needs amid the global economic downturn. Turkey's previous $10 billion loan deal with the fund expired last May.