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

BIST lost 1.99% yesterday amid heavy foreign institutional selling that can be partly attributed to the quarterly MSCI reshuffle. After an uptick open, index quickly turned south and continued its descent almost for all of the day to close just a tad above its intraday low. Banks lost 2.24% on average with HALKB underperforming peers. THYAO, TAVHL, KCHOL, TUPRS, PETKM, EKGYO, BIMAS, ASELS, FROTO, DOAS, IPEKE, and GUSGR were among the weakest non-banks while BIZIM, SOKM, MGROS, TOASO, GOZDE, VESTL, AKGRT, OTKAR, and LOGO topped the limited list of gainers. Coming to start of the new month, our macro agenda involves August'20 PMI that will be announced at 10AM local time. The index had jumped 5.6% on a sequential basis to 56.9 in July to its highest point since February'11 as the recovery after the pandemic had gained traction. This will be followed by Istanbul Chamber of Commerce's August'20 inflation numbers for metropolitan Istanbul at noon local time and BRSA's banking industry aggregates for July'20 at 2PM. Cumulative banking industry profits stood at TL3.34bn in July'19 and at TL3.40bn in June'20. BIST seems off to a slight positive start as lira is gaining some ground (USDTRY around the 7.34 mark in early trades vs 7.3640 at yesterday's closing bell). U.S. futures are up a few points while Asian equities are trading mixed.