Turkey Wake-up call: Macro, Political and Equity News, 1st February

BIST lost 1.66% on Friday as the retreat seemed to have resumed after a one-day respite, carrying the weekly decline to 4.47%. After a gap lower start on Friday, BIST100 index gradually climbed to 1,495 levels until mid-day, followed by a new round of selling pressure in the afternoon as gains in lira failed to impress equity investors. Banks lost 1.47% on average amid underperformance of ISCTR and AKBNK. FROTO, BIMAS, SOKM, ARCLK, TTKOM, TCELL, EREGL, ALARK, and MAVI topped the long list of decliners while EKGYO, GUBRF, MPARK, DOHOL, DEVA, VESTL, and OTKAR were among the gainers. Coming to start of the new month, our local macro agenda is crowded, starting with the January'21 PMI to be announced at 10AM local time. The index had retreated 1.2% on a sequential basis to a 7-month low of 51.4 in December, but had remained above the 50 neutral line for the seventh consecutive month. This will be followed by Istanbul Chamber of Commerce's January'21 inflation numbers for metropolitan Istanbul at noon local time. Lastly, BRSA will release banking industry aggregates for December'20 at 2PM. Cumulative industry profits stood at TL2.49bn in December'19 and at TL7.30bn in November'20. BIST seems off to a flattish start with a positive bias amid a better mood abroad and sustained gains in lira (USDTRY tad below 7.28 levels vs 7.2952 at Friday's closing bell). U.S. futures are up 0.45% in partial reversal of their c.1.2% overnight losses after we left on Friday and Asian markets are almost all trading in the green.