ISTANBUL Turkish markets were mostly steady on Monday morning as investors looked ahead to an IMF meeting to approve the next $1.56 billion tranche of an emergency loan and the steps Turkey needs to take to win the cash.

Market participants said all eyes were locked on the IMF meeting set today and legislation Turkey has pledged the lender to close down wobbly state-owned Emlak Bank.

The law has been passed by Parliament and awaits ratification by the president, a former judge who has previously rejected laws on legal technicalities.

"Everyone is waiting for the IMF meeting on the second tranche and for the law on Emlak Bank with the president," said Emre Sezan of Alfa Securities.

The main share index in Istanbul closed the morning session down 0.65 percent at 11,131.37 points, despite major gains on individual shares.

The lira was trading at 1,255,000 against the dollar on the Interbank spot market, little changed from Friday, when the currency closed at 1,258,000 to the dollar.

Bankers said an expected strengthening in the lira, after buying of dollars at the end of the month, had not emerged.

"In the morning the lira tested 1,240,000 but came back ... the reason could be tension over Emlak Bank," said one banker.

Emlak Bank's closure is one of a range of pledges Turkey has made to the IMF in return for an international lending package foreseeing $15.7 billion in lending this year to help it out of an economic crisis sparked by fears of political instability, Reuters reported.

While volumes on the equities market were tame, there were spots of activity, particularly in Finansbank, which on Monday announced a deal with BNP Paribas for the French bank to buy a majority stake.

Finansbank was up 9.21 percent at the midday break but slow trade in the main listed shares held back any overall rise.

"The market has moved into waiting mode ... despite activity in some shares, the lack of movement in the big ones means that won't be reflected in the index," said Bulent Onder of Acar Securities.