Turkish equities fall on banking regulation changes
ISTANBUL Aug 19 (Reuters) - Turkish equities slid on Monday as the market fretted over the impact of new banking regulations, while bonds slipped before Tuesday's policy meeting at the central bank, which is seen sticking to its current monetary settings.
The main Istanbul share index closed down 2.55 percent at 72,382.71, underperforming the broader emerging markets index, which was down 1.42 percent.
Banks make up 41 percent of the total market capitalisation of the index and were among the heaviest fallers on the Istanbul Stock Exchange, due to concern that planned new regulations will hurt their profits.
The banking watchdog published draft measures on Friday to discourage what it sees as excessive use of retail credit cards and to promote commercial loans.
Investor attention was also focused on a central bank meeting on Tuesday. All 15 economists in a Reuters poll expected the bank to keep its main policy rates on hold, while two said it may raise its overnight lending rate by 50 basis points.
The yield on the 10-year bond closed at 9.38 percent, up from Friday's close at 9.25 percent.
The lira weakened to 1.9504 against the dollar by 1510 GMT, compared with 1.9370 late on Friday, hurt by the rise in U.S. government bond yields which makes the U.S. currency more attractive to investors.
"The rise in U.S. Treasury yields continue to exert depreciation pressure on EM currencies," Erkin Isik from TEB said in a research note. ($1 = 1.9446 Turkish liras) (Editing by Hugh Lawson)
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