September 26, 2012 / 8:01 AM / 5 years ago

Turkish bonds retain gains spurred by debt auctions, shares dip

* Lira eases as investors focus on Europe’s challenges

* Attention turns to inflation data

* Shares dip 0.3 percent

ISTANBUL, Sept 26 (Reuters) - Turkish bonds were steady on Wednesday after successful debt auctions the previous day while shares and the lira eased slightly as investors focused on Europe’s fiscal challenges.

Turkish bonds rose on Tuesday after the Treasury sold two-year benchmark paper at a lower-than-expected yield.

The Treasury sold 3.65 billion lira ($2.04 billion) of Sept. 24, 2014 benchmark bonds at a yield of 7.56 percent, below a forecast 7.60 percent in a Reuters poll of 10 banks.

The yield on Turkey’s two-year new benchmark bond fell on Wednesday to 7.49 percent, from a close of 7.52 percent on Tuesday.

Including sales to public institutions, Turkey’s total borrowing amounted to 7.9 billion lira in September, exceeding the government’s target of 7.4 billion lira.

The market was now shifting focus to September inflation data due on Oct. 3, analysts said.

“I do not see a distinct drop (in yields) in the bond market while it is waiting for inflation data ... unless there is an increase in risk appetite,” said Pinar Uslu, a strategist at ING Bank.

“For the benchmark bond yield, on the downside 7.35 percent could be a strong level,” she said.

The Turkish central bank said on Tuesday that the recent decline in inflation may come to a halt in September, but that a gradual fall in core inflation was expected to continue.

By 0727 GMT the lira was at 1.7930 against the dollar , easing from 1.7890 late on Tuesday. Against its euro-dollar basket, it fell to 2.0509.

The lira and shares were hit by reduced appetite for riskier emerging market assets on renewed concerns about Spain and Greece’s finances.

Istanbul’s main share index fell 0.3 percent to 67,607.69 points, outperforming a 0.83 percent fall in the MSCI emerging markets index. ($1 = 1.7919 Turkish lira) (Reporting by Behiye Selin Taner; writing by Seda Sezer; Editing by Susan Fenton)

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