ISTANBUL: The Turkish lira weakened on Thursday after the bomb attack that killed 28 people in the capital Ankara a day earlier.
The attack fuelled fears of an escalation of violence in the region, but some analysts said much of Turkey's political risk premium had already been priced in.
"In addition to the elevated geopolitical tensions, we believe that the Turkish financial assets may underperform due to the security concerns in the medium term," a note from Odeabank said.
Last week assets waned on talk of a Turkish ground intervention in Syria, despite officials denying that Ankara would go in without western allies.
"Risks to political stability should to some extent be incorporated in Turkey's country risk premium," a note from Finansbank said.
The lira stood at 2.9620 against the dollar at 0920 GMT, easing from 2.9466 late on Wednesday.
The main share index edged up 0.1 percent to 72,873 points, lagging behind its emerging market peers which were up 1.12 percent.
The benchmark 10-year government bond yield rose to 10.95 percent from 10.89 percent at Wednesday's close.
Analysts said some of the impact of the attack on Turkish assets had been mitigated by dovish minutes from the U.S. Federal Reserve which indicated no U.S. rate hike until data affirms a continued recovery in employment and inflation.
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