GDANSK - Turkish stocks and the lira stabilised, while the country's international bonds nudged higher on Monday, after last week's sharp swings ​triggered by a court ⁠ruling targeting the main opposition leadership. 

The benchmark BIST 100 index opened 0.6% higher on Monday, ‌but gave away much of those gains to trade up 0.05% by 0847 GMT. The banking index gained ​0.4%, indicating a cautious rebound in a market still sensitive to political developments.

The lira was quoted at 45.7200 against the ​U.S. dollar, compared ​with a close of 45.70 on Friday.

In bonds, the 2041 paper was up 0.4 cents to 84.8 cents on the dollar, Tradeweb data showed. Five-year credit default swaps (CDS) - an ⁠instrument to insure exposure to sovereign bonds against default - stood at 252.8 basis points on Monday, unchanged from Friday's close, data from S&P Global Market Intelligence showed.

A Turkish court last week annulled the country's main opposition party (CHP) congress that elected leader Ozgur Ozel in 2023, citing procedural irregularities. The ruling effectively ​removed Ozel from his ‌position, triggering a ⁠deepening political crisis that ⁠has unsettled investors.

Tensions escalated further over the weekend when Turkish riot police used tear gas to enter CHP ​headquarters in Ankara to enforce an eviction order for party officials inside ‌the building.

Analysts view the court ruling as a test of the ⁠balance between democracy and autocracy for NATO member Turkey, and say that it could prolong President Tayyip Erdogan's 23-year rule.

"As usual, and having watched similar roller coasters in the past, I believe that the dust will settle in the short run, after a period of volatility and questions regarding the political stability - lira, CDS - are to be closely watched," said Ipek Ozkardeskaya, senior analyst, Swissquote.

"Unless the latter (weekend) events lead to broader unrest and cracks in the broader system - as a way to modify medium-long term policies, the long-term impact will likely remain limited."

Soon after the court decision ‌last week, the BIST 100 plunged around 6%, prompting a market-wide circuit ⁠breaker. Most of Turkey's international bonds lost more than 1 cent ​on Thursday, dropping to multi-week lows.

Markets rebounded on May 22, with the benchmark index rising 4.5% in Istanbul, recovering part of the previous day's losses.

Despite Monday's gains, markets remain sensitive to developments surrounding the CHP and ​broader political ‌risks, following last week's volatility across equities and other Turkish assets.

Trading is thin ⁠with both the UK and U.S. markets ​shut for bank holidays.

(Reporting by Canan Sevgili, editing by Karin Strohecker and Harikrishnan Nair)