* Shares inch up, banking shares, airport operator TAV gain
* Lira eases after Tuesday's rate cut
* Bond yields lower
By Seda Sezer
ISTANBUL, Jan 23 Turkish shares hit record highs
on Wednesday, with the banking index leading gains
on market expectations of strong fourth-quarter results in the
By 1540 GMT the main Istanbul share index rose 0.81
percent to 86,340.97 points, with the banking index up 0.97
Isbank shares rose 2.49 percent to 7.40 lira.
Garanti was up 0.2 percent at 9.98 lira.
Airport operator TAV rose 1.37 percent to 11.10 lira after
saying late on Tuesday that authorities would compensate it for
any losses if a planned third airport opened in Istanbul while
it is still running Ataturk, the country's largest.
The yield on the two-year benchmark bond
stood at 5.84 percent, down from 5.90 percent on Tuesday.
By 1543 GMT, the lira was at 1.7717 against the dollar
compared with 1.7706 late on Tuesday, easing for a
second day after the central bank cut some interest rates to
keep the strong local currency in check and to curb loan growth.
The bank cut its overnight borrowing rate to 4.75 percent
from 5 percent and its lending rate to 8.75 percent from 9
percent on Tuesday. It held its one-week repo policy rate at
"With its decision the central bank defended against an
appreciating lira," HSBC strategist Fatih Keresteci said in a
research note, adding there was now less of a chance of the lira
strengthening to below 1.75 to the dollar.
The lira hit 1.7513, its strongest in ten months last week,
fuelled by expectations of a second credit rating upgrade for
Turkey is hoping another major ratings agency will lift it
to investment grade after Fitch did so last November. A second
upgrade would enable Turkey to join benchmark investment grade
bond indexes, a status that many funds require before investing.
(Editing by Nick Tattersall, John Stonestreet)