Turkish lira eases on Ukraine tensions, Turkcell shares up

ISTANBUL, April 28 Mon Apr 28, 2014 3:32am EDT

ISTANBUL, April 28 (Reuters) - The Turkish lira weakened on Monday as rising tensions in Ukraine weighed on emerging markets, while Turkcell shares gained after a court ruling opened the way to resolving a dispute among its shareholders.

The lira eased to 2.1380 to the dollar by 0710 GMT from 2.1335 late on Friday. The central bank kept its main interest rates on hold last week, lending support to the lira.

The main Istanbul share index fell 0.18 percent at 71,261.33 points, in line with the emerging market index which fell 0.15 percent.

A U.S. appeals court on Friday threw out a ruling that froze the assets of Turkey's Cukurova Holding, clearing the way for it to try to buy back a controlling stake in Turkcell.

Shares in Turkey's biggest mobile phone operator rose 3.8 percent to 12.25 lira. Analysts said that if Turkcell can resolve its ownership dispute it could pave the way for the general assembly to meet and decide on the distribution of dividends for the past four years.

Investors were awaiting the central bank's quarterly inflation report on April 30. It has said monetary policy would remain tight until the inflation outlook improves significantly. Annual inflation stood at 8.39 percent in March.

"As (the bank's)... attempt to ease liquidity policy and lower interbank rates down to 10 percent led to depreciation pressure on the lira, they are likely to stick to their tighter stance for now," said Erkin Isik, a TEB-BNP Paribas strategist.

There was a boost to market sentiment on Monday from Turkey's consumer confidence index, which rose 7.9 percent to 78.5 points in April from 72.7 points a month earlier, data showed.

The 10-year benchmark bond yield fell to 9.87 percent from 9.89 percent at Friday's close. (Reporting by Seda Sezer; Editing by Daren Butler, John Stonestreet)

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