Falling Koc, Dogan shares drag Turkish stocks down

ISTANBUL, Sept 13 (Reuters) - Turkish stocks fell on Friday after shares in two major conglomerates plunged following reports of a complaint against them in a court case over the ousting of Turkey's first Islamist-led government 16 years ago. Shares in Dogan Holding sank nearly 8 percent after the Sabah newspaper said a complaint had been filed against its owner, Aydin Dogan, in the trial, which began two weeks ago. Shares closed 6.67 percent lower at 0.84 lira Shares in Turkey's biggest company Koc Holding, also reportedly named in the complaint, fell 4 percent after the news. It later trimmed losses to close 0.88 percent lower at 8.96 lira. "The Prime Minister made remarks on this issue yesterday, and today two of his advisers wrote in newspaper columns on the same issue. Names of the two companies being associated with this case have created selling pressure on the stocks," an analyst covering the two companies for an Istanbul-based brokerage said. The reported complaint against Koc and Dogan came a day after Erdogan said he was "surprised" that corporate interests which he said had been supportive of past coup attempts in Turkey had not been held to account. The main share index fell 1.5 percent to 71,635 points, after five consecutive day of gains, underperforming the broader emerging market index, which fell 0.43 percent. Turkey's lira fell on Friday after a higher-than-expected current account gap added to the economic imbalances that leave it among the most exposed to a cut in U.S. Federal Reserve bond-buying next week. Turkey has been among the biggest sufferers among higher-yielding emerging markets in recent weeks as investors began to withdraw much of the cheap dollar funding poured into the U.S. banking system by the Fed. Its huge current account deficit, $5.786 billion in July compared to a revised $4.626 billion in June, means it is dependent on an inflow of foreign capital to give it the hard currency it needs to buy oil and other imports, and leaves the lira stricken when capital instead flows out. "The higher-than-expected current account deficit is likely to pressurise exchange rates as capital inflows are getting slower in the second half of the year in line with other emerging markets mainly due to Fed tapering concerns," analysts at EkspresInvest wrote in a research note. Analysts expect the Fed will announce on Wednesday that it will trim its monthly spending on asset purchases by $10 billion, according to a Reuters poll of economists, although much of that move looks now to have been priced in to markets. The lira weakened to 2.0301 against the dollar by 1552 GMT from 2.0175 late on Thursday. The yield on the 10-year bond was almost flat at 9.79 percent from Thursday's close. (Writing by Ece Toksabay)


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