GDANSK, May 25 (Reuters) - 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.