ISTANBUL (Reuters) – Turkish markets fell yesterday amid continued uncertainty over the fate of Turkey’s European Union negotiations due to a dispute over Cyprus. The main Istanbul Stock Exchange fell 1.11 percent to 37,654.94 percent in the morning session while the lira eased 0.57 percent against the dollar to 1.482 at 1013 GMT despite the greenback’s fall in global markets. The lira touched its weakest level in more than a month yesterday, with the squaring of books by foreign investors before the end of the year contributing to its losses. Traders have predicted the lira may fall to the 1.52 level. «The markets are moving exclusively on Turkey-specific factors. The EU and Cyprus are the primary concerns,» said Demir Life Insurance portfolio manager Cengiz Kilic. The Turkish markets are no longer moving in line with the international markets. «The correlation with overseas markets first disappeared in stocks and now the dollar is not easing against the lira though it is losing ground against other currencies,» said Kilic. Bonds were also weaker with the August 13, 2008 benchmark bond yielding 21.61 percent, up from 21.56 percent a day before. A decision by the Turkish central bank after markets closed on Thursday to leave key interest rates unchanged will have little impact on markets as this was expected, bankers said. The bank said in a statement it would keep a tight monetary policy due to global economic uncertainty. Investors are becoming more pessimistic about attempts to salvage Turkey’s EU bid from a crisis next month as the EU has threatened Turkey with unspecified consequences if it does not open its ports to EU member Cyprus by December 6. «Mixed statements up until December 6 will be a cause of continued uncertainty. As long as this uncertainty lasts, even if foreign bourses are upbeat, selling pressure on the stock index will continue and upward movement will remain limited,» said Alper Erginol of Oyak Investment. «Demand from foreign investors will not come because of this uncertainty,» Erginol added.