ISTANBUL (Reuters) – Turkey’s lira rose and equities fell yesterday as investors took profits after Tuesday’s record close, while investors were unfazed by the possibility of a military operation against Kurdish rebels in Iraq. Turkey’s lira stood at 1.1850 against the dollar at the close of the interbank market, strengthening slightly from its Tuesday close of 1.1855. The main Istanbul stock index fell 0.85 percent to 57,418.04 points. «After yesterday’s rise, we had profit-taking. There was a correction in both European markets and on the IMKB (stock exchange),» said Kadir Tezeller, strategist at Seker Invest. Turkish Prime Minister Recep Tayyip Erdogan yesterday confirmed plans to authorize a military incursion into northern Iraq, from where Kurdish rebels launch attacks against Turkish military targets. Markets have been unaffected by the announcement, which drew a warning from the United States, as analysts say the chances of a full-scale operation were low, although small, selective attacks were more likely. Lira bonds strengthened, with the yield on the May 6, 2009 benchmark falling to 16.00 percent from 16.31 on Tuesday. In Thursday-dated trade it eased to 16.08 percent. A Reuters poll yesterday saw a 25 basis point cut from the Turkish monetary policy committee next week. The MPC surprised investors last month with a 25 basis point interest rate cut from borrowing rates. Meanwhile yesterday, the US House of Representatives’ Foreign Affairs Committee were to consider a bill recognizing massacres of Armenians by Ottoman Turks in 1915 as genocide, a bill which threatens to harm ties between the NATO allies. Turkey strongly denies Armenian claims, which are backed by many Western historians, that Armenians suffered a systematic genocide at Turkish hands in World War One. Ankara says many Muslim Turks died alongside Christian Armenians in interethnic conflict as the Ottoman Empire collapsed.