UPDATE 2-Turkish assets slip as investors await IMF deal

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By Alexandra Hudson and Thomas Grove

ISTANBUL, Dec 1 (Reuters) - Istanbul shares slumped more than 5 percent on Monday following global markets lower as investors took profits and awaited more details of Ankara's economic stimulus package and an announcement on a new IMF deal.

The lira IYIX= also weakened to the dollar, closing on Monday at 1.597, down 1.4 percent from Friday's close of 1.5740 to the dollar.

"Today's sell-off is more than just profit taking. We can say that a bear market rally has ended for now. We are all in the same boat internationally, and any wave that comes along hits all of us together," said Deniz Can Yucel, head of equity research at Yatirim Finansman Securities.

"Unfortunately ... investors seem to punish (Turkey) more as it has not yet taken sufficient precautions to deal with the global economic crisis."

Stocks closed down 5.38 percent at 24,331 points, having gained some 15 percent last week on renewed market optimism.

They underperformed the MSCI index .MSCIEF of emerging market shares which traded down 2.24 percent, while European stocks .FTEU3 traded 4.5 percent lower.

There is mounting frustration among business leaders and investors at the length of time it is taking for Ankara to announce its stimulus package in full and to seal negotiations with the IMF.

"We are beginning a critical week for Turkey. Markets anxiously await development," brokers at Tera wrote in a research note.

Prime Minister Tayyip Erdogan said on Sunday that measures to boost the economy were nearly ready and that the worst of the economic crisis was now past. In a televised address to the nation, Erdogan said the planned stimulus package would give significant support to the real economy.

It is expected to include access to cheap credit for smaller businesses and measures to boost employment.

Erdogan also said last week that his government was still negotiating with the IMF on the terms of a possible deal.

The lira has lost almost a third of its value to the greenback since a global asset sell-off in October, but has pulled back from lows of 1.74. Stocks have halved in value since the start of 2008.

Export data boded poorly for the Turkish economy as November exports were 22 percent lower year-on-year at $8.659 billion, with Turkey's large automotive sector leading the fall with a 37.9 percent drop.

Retail inflation in Turkey's largest city Istanbul was posted at 0.23 percent, the city's chamber of commerce said on Monday.