Turkey Wake-up call: Macro, Political and Equity News, 22th October

BIST climbed 1.58% yesterday thanks to the rally in major industrial stocks although the market got whipsawed following the surprising 200bps rate cut. Banks failed to join the party as their sector index lost 0.09% for the day. It was the strength in non-financial names like EREGL, TUPRS, FROTO, ENKAI, TTRAK, MGROS, BRISA, and DOAS that pushed the broader market higher while KCHOL, ENJSA, MAVI, YATAS, GLYHO, and ODAS were among the rare decliners. Coming to this morning, our local macro agenda is quiet while we will keep an eye on S&P's scheduled review of Turkey's sovereign rating regarding which any related announcements are expected to be released after markets close. The agency rates Turkey at B+, four notches below investment grade, with a stable outlook. S&P is broadly expected to affirm Turkey's rating at B+ with Stable outlook while only 1 out of 10 economists surveyed by ForeksTurkey anticipates the outlook to be cut to Negative from Neutral. BIST seems off to a sideways open as the better sentiment abroad may be balanced out by the weakness in lira (USDTRY at 9.51 level in early trades vs 9.4559 at yesterday's closing bell) and FATF's decision to include Turkey in its grey list of closely-monitored jurisdictions last night. S&P futures are down c.0.15% in early trades while Asian stock markets are mostly trading in the green.