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

BIST added 1.01% yesterday after a day entirely spent in positive territory with the support from the upbeat sentiment in global markets. Banks outperformed with the 2.27% gain in their sector index amid strength in AKBNK and ISCTR while GARAN and HALKN lagged peers. ENJSA, AKSEN, OYAKC, HEKTS, ENKAI, AGHO, and AKSA stood out among the non-bank gainers while TOASO, ASELS, PETKM, INDES, SELEC, and KARSN were some of the fewer weak spots in the the BIST100 universe. Coming to the start of the new month, our local macro agenda involves January'22 PMI that will be announced at 10AM local time. The index had ticked up 0.2% on a sequential basis to 52.1 in December and had stayed in expansion territory for the seventh consecutive month after the loosening of pandemic restrictions. Expansion in new export business and solid increase in employment at the fastest pace since August had supported the headline index while steep inflationary pressures had led to moderation in both total new orders and production. Separately, Istanbul Chamber of Commerce will reveal its January'22 inflation numbers for metropolitan Istanbul at noon local time. We foresee a slight positive open for the BIST given continued optimism abroad. U.S. futures are down 0.2% in early trades, but maintaining a good part of the 1.2-1.5% overnight gains after the hour we left and Asian markets are almost all trading in the green.