ISTANBUL, (Reuters) - Turkish shares closed flat on Tuesday, May 22, losing early gains when a treasury debt auction failed to meet its targets, spooking investors concerned by Turkey's large debt burden.
The treasury announced it had sold a net 2,162 trillion lira ($1.95 billion) in six- and 10-month papers, short of its minimum net target of 3,100 trillion, but at yields lower than previous debt sales.
Investors are worried the treasury will have difficulty borrowing at the low interest rates it needs to roll over a large domestic debt stock in the coming months.
"The situation has made the market fairly concerned. If we see a similar picture in June that won't be welcome," said Emre Ozben of Nurol Securities.
The auction comes against scheduled debt servicing of 3,400 trillion lira.
The main ISE National-100 index ended just 0.3 percent higher at 12,643.75 after fluctuating between 12,455 and 13,105.
Turnover for the day rose to 735.59 trillion lira from Monday's 484.07 trillion. Of 302 shares traded, 126 rose, 98 declined and 78 were unchanged.
The transportation sector led the gainers, rising 1.4 percent after Turkish Airlines announced it had taken payment for sale of an aircraft it is removing from its fleet.
The tourism sector lost 3.8 percent after last week's strong gains.
Large commercial banks Yapi Kredi Bankasi, unchanged at 5,600, and Garanti Bankasi, up 1.45 percent to 7,000, were the most active shares.
Both shares, among the more liquid on the Istanbul market, fell from early highs after the auction news was announced. Large banking shares rose last week in anticipation of sectoral reform and a debt swap plan that might offer them longer-term forex bills for lira papers.
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