Concerns about some European countries' debt problems also limited gains. Europe is Turkey's biggest export market.
The ISE National 100 index rose 0.49 percent to 55,131.63, underperforming an index of emerging-market peers that gained 1.0 percent.
'Making bold bets on the overall direction of the market is not a very good strategy for the short term, in our opinion. There is too much political noise as well as economic concerns arising from the EU,' Tera Brokers said in a note.
Turkey, a non-permanent member of the U.N. Security Council, on Wednesday voted against imposing sanctions on Iran for its nuclear programme. This followed a diplomatic furore with Israel after nine Turkish activists were killed during a May 31 Israeli military raid on a Turkish ship carrying aid to blockaded Gaza.
U.S. officials have expressed worries that Muslim Turkey, a member of NATO, is turning eastward as its European Union bid stagnates.
'The market is lagging after yesterday's rise in U.S. stocks. Even if politics isn't enough to sell, people are refraining from buying,' said Emre Balkeser, a trader at FinansInvest.
However, strong economic growth forecasts mean Turkey could soon start to outperform peers again, he added.
Prime Minister Tayyip Erdogan said on Thursday gross domestic product could grow between 6 and 7 percent this year, and Finance Minister Simsek said the Organisation for Economic Co-operation and Development's (OECD) forecast of 6.8 percent growth was reasonable.
The lira traded at 1.5780 to the dollar from a close of 1.592 on Thursday. Yields on the most actively traded Jan. 25, 2012 bond traded at 8.83 percent, down from 8.88 percent on Thursday.
Turkey's current account deficit soared 175 percent year-on-year to $4.36 billion in April, the central bank said, in line with a Reuters poll forecast for a $4.35 billion deficit.
On the stock market, Petrol Ofisi was flat at 6.50 lira as investors shrugged off news that Turkey's biggest chain of gas stations had agreed to a reduced tax fine with the Finance Ministry for 7.6 million lira in back taxes and penalties. That compared with an original penalty of 19.9 million lira.
(Reporting by Ayla Jean Yackley; editing by Susan Fenton) (ayla.yackley@reuters.com; +90 212 350 7053; Reuters Messaging: ayla.yackley.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2010 AFX News
