Turkey Wake-up call: Macro, Political and Equity News, 19th January

BIST took a 5.08% dive yesterday with a late afternoon sell-off, snapping its 11-day winning streak. The BIST100 index spent most of the day in negative territory as the sour sentiment abroad finally took its toll on Turkish stocks, but the pressure intensified after 5PM. A market-wide circuit breaker went into effect at 5:32PM and trading was completed for the day given less than 30 minutes left in the session. Banks that held up well earlier also yielded to the late sell-off and lost 4.49% on average. ZOREN, CANTE, and NTHOL were the only 3 gainers in the BIST100 universe while PETKM, ISGYO, ALARK, PGSUS, KRDMD, TKFEN, TTRAK, and TTKOM topped the decliners. Coming to this morning, our local macro agenda is again quiet. On the political front, President Erdogan will chair the cabinet meeting starting at 4PM local time and before that, he is scheduled to speak at the meeting of the neighborhood headmen at 2PM. We anticipate a negative start for the BIST given continued weakness in global bourses as well as sell-orders likely left to be completed from the abrupt end to trading yesterday. U.S. futures are down almost 0.7% and Asian equity benchmarks are all trading in the red. Lira is almost unchanged with USDTRY around the 13.60 mark vs 13.6062 at the time of BIST closing.