* Bank stocks lead shares lower
* Bond yields inch down, lira eases
* Moody's comments discourage rating upgrade hopes
(Adds Moody's, prices, quotes)
By Seltem Iyigun
ISTANBUL, Jan 28 Banking stocks led Turkish
shares lower and the lira eased on Monday after Moody's said the
country needed to improve its resilience to external shocks to
win an investment grade rating.
The main Istanbul share index dipped 4.2 percent to
81,165.81 points, underperforming a fall of 0.7 percent in the
global emerging markets index. Banking stocks
fell 5.6 percent.
The lira eased to 1.7726 to the dollar by 1721
GMT, from 1.7698 late on Friday. Against its euro-dollar basket
it slightly eased to 2.0758, from to 2.0742.
The yield on the two-year benchmark bond
closed at 5.85 percent, a touch lower than Friday's close at
Moody's, which rates Turkey just below investment grade at
Ba1 with a positive outlook, said the country needed to narrow
its current account deficit, boost foreign reserves, or reduce
private sector external borrowing to win an upgrade.
Fitch upgraded Turkey to investment grade at BBB- in early
November, and Turkey needs at least one of the two other major
ratings agencies to follow suit for it to join benchmark
investment grade bond indexes, a status that many funds require
before investing in a country.
Hopes that Moody's would upgrade Turkey had boosted Turkish
assets in recent weeks.
"It seems that today's statement delayed the market
expectations about Turkey getting a rating upgrade to investment
grade soon from Moody's," said Bilge Gonen, head of forex at
Shares in Turkey's Isbank fell 7.26 percent to
6.64 lira after the bank's retirement fund said it will
gradually sell 45 million lira worth of nominal shares,
equivalent to 1 percent of its equity, in the stock market.
(Writing by Seltem Iyigun; editing by Ron Askew)