ISTANBUL, (Reuters) - Turkish shares fell one percent on Monday, May 21, as the market waited for a treasury debt auction on Tuesday and the outcome of public wage talks that will both show the state of Turkey's crisis recovery plans.
The main ISE National-100 index ended 1.03 percent lower at 12,607.24, after swinging between 12,452 and 12,890 during the day. Gains were 8.14 percent last week on optimism, after a deal with the IMF unlocked $15.7 million in international lending to help Turkey pull out of crisis.
Central to the new plan is cutting the rate Turkey pays to borrow money and brokers are watching Tuesday's debt auction for signs of lower rates.
"We have to see the demand for the bill auction. Following the auction result, it is possible to see a movement (in the index) towards 13,000," said Berna Yurek at Toprak Securities.
The Treasury will auction six- and 10-month bills on Tuesday to meet a debt repayment of 3,382 trillion lira ($3.03 billion).
The economy program also depends on legal reforms, some of which are awaiting ratification by President Ahmet Necdet Sezer, a lawyer who has rejected legislation in the past on technical and constitutional grounds.
Brokers said ongoing talks with public sector labour groups on a pay deal would show the government's ability to push through politically sensitive spending cuts.
"If a negative outcome emerges from the public wage talks, the index may slide to 12,000 levels. But it is likely to see buying there," said Gurkan Gencay at Toros Securities.
Trade volume fell to 484 trillion lira ($433.6 million) from Friday's 569.9 trillion lira. Of 301 traded shares 136 rose, 107 fell and 58 held unchanged.
The most active share of the day was media group Dogan Holding , down 3.39 percent at 5,700 after recent gains, partly over the implications of reform of Turkey's broadcast media regulator and the group's energy sector activities.
© 2001 Mena Report (www.menareport.com)