ISTANBUL: Turkish stocks and the lira weakened on Wednesday, in line with emerging market peers, as investors awaited policy signals from the U.S. Federal Reserve
That overshadowed optimism that key economic ministers would remain in a new Turkish cabinet.
Senior ruling party officials told Reuters the key ministers responsible for the economy were likely to retain their roles when Prime Minister Tayyip Erdogan assumes the presidency later this month.
Investors have been particularly concerned about the position of Deputy Prime Minister Ali Babacan and Finance Minister Mehmet Simsek, who have guided the Turkish economy towards unprecedented stability in recent years.
Foreign Minister Ahmet Davutoglu is seen as likely to become prime minister.
"The prime minister is expected to be officially announced tomorrow but uncertainty over the next economic team in the cabinet will remain until (the appointment) becomes official on Aug. 27," said Erkin Isik, a strategist at TEB-BNP Paribas.
"However, recent news suggests that the economy team will remain intact, which could lead the lira to reverse some of its recent underperformance."
Istanbul's main share index was down 0.66 percent at 78,764 points by 0920 GMT after rising 2.5 percent on Tuesday. It was underperforming the broader emerging markets index, which was down 0.1 percent.
The lira was also weaker, trading at 2.1713 to the dollar versus 2.1645 late on Tuesday.
Riskier emerging markets assets had been underpinned by a shift in attention away from the Ukraine-Russia conflict, but investors used the relatively calm economic and political backdrop to take some money out of the market.
Later in the day, minutes from the last Federal Reserve policy meeting will be released, closely watched by investors in Turkey, which relies on foreign capital flows to finance its gaping current account deficit.
Turkey's benchmark two-year bond yield rose to 9.32 percent from 9.24 percent a day before.
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