ISTANBUL, Aug 19 (Reuters) - Turkish bonds and the lira were flat in subdued early trade on Wednesday after the Turkish Central Bank cut key interest rates by 50 basis points as expected.
The lira
The yield on the May 11, 2011 benchmark bond <0#TRTSYSUM=IS> was 9.90 percent in over-the-counter trade, up from a spot close of 9.85 percent but below Wednesday-dated trade of 9.93 percent on Tuesday. It hit a record low of 9.78 percent last Friday.
"After the central bank's rate cut the first trades display a subdued trend. The rate decision was as expected," said a bond trader at one local bank.
The central bank cut its main interest rate to a record low of 7.75 percent and said further measured rate cuts would be necessary if no significant signs of economic recovery appeared.
The cut brought total easing since November to 9 percentage points as the bank attempts to boost an economy that contracted 13.8 percent in the first quarter.
"Turkish equities are displaying a mixed outlook. The main index failed to pierce 45,500 level again. We still think that the rally is losing steam; we expect a rangebound trading today," Tera Brokers said in a daily note.
The main Istanbul share index <.XU100> closed 0.13 percent lower at 44,233.36 on Tuesday, underperforming the MSCIEF emerging markets index <.MSCIEF> as profit taking hit banks.
The Turkish index has risen some 66 percent since the start of the year, more than its emerging market peers. (Reporting by Nevzat Devranoglu, writing by Daren Butler)