U.S. Markets closed

UPDATE 1-Turkish lira weakens after Turkey launches Syria ground assault

(Adds quote, shares, bonds, background)

ISTANBUL, Oct 10 (Reuters) - The Turkish lira weakened against the dollar on Thursday as investors fretted about negative international reaction to a ground operation launched by Turkish troops against a Kurdish militia in northeast Syria overnight.

The lira weakened to 5.88 against dollar from a close of 5.8740 a day earlier. It weakened 0.5% on Wednesday when the operation began with air strikes.

Turkish troops were attacking a Kurdish militia in Syria which Ankara regards as a terrorist organisation, pounding them with air strikes and artillery before starting a cross-border ground operation.

The lira has come under pressure since the White House announced the withdrawal of some U.S. troops from the Syrian region near Turkey's border. The subsequent military operation has drawn almost universal condemnation internationally.

Investors are concerned about proposed U.S. sanctions on Turkey following the start of the incursion, including targeting Ankara's military transactions and U.S. assets of President Tayyip Erdogan.

"We can say that the current pricing in the market is more focused on geopolitical concerns over international reactions to the Syria operation," a senior banker said.

The market pressure could continue until President Erdogan and U.S. President Donald Trump meet in November, the banker said.

Turkey's sovereign dollar-denominated bonds came under pressure for a fourth straight day with longer-dated issues suffering the biggest declines. The 2038 slipped nearly 1 cent to a three week low, Tradeweb data showed.

Turkey's main stock exchange index BIST100 was down 0.64%. Turkish banking index traded down 0.77%. (Reporting by Nevzat Devranoglu; Writing by Ezgi Erkoyun; Editing by Daren Butler)