Turkey Wake up call: Macro, Political and Equity News, 27th July

BIST edged up 0.14% on Friday as a late session recovery helped the market recover its losses and the index booked a 0.35% cumulative gain for the week. In tandem with the weakness in global markets, benchmark BIST100 opened gap lower around the 118.2k mark on Friday morning and staged a gradual recovery. There was another wave of selling after 4PM, but the index managed to crawl its way back to a small positive close. Banks lost 0.36% on average amid pressure on GARAN and the two state lenders. GUBRF, SOKM, TTRAK, SISE, SODA, AYGAZ, HEKTS, VESTL, and ARCLK led the non-bank gainers while FROTO, ALKIM, BRISA, AKSEN, ODAS, MPARK, and GOZDE were among the weak spots. S&P affirmed its unsolicited long-term foreign-currency rating for Turkey at B+ (four notches below the investment-grade) as well as the Stable outlook following its scheduled review on Friday evening, as expected. Coming to this morning, our local macro agenda involves July'20 Manufacturing Capacity Utilization Rate (CUR stood at 66.0% in June'20 and was 76.2% back in July'19) and July'20 Real Sector Confidence index (was at a 3-month high of 92.6 in June'20 and had stood at 98.3 back in July'19) both to be released at 10AM local time. We anticipate an uptick open for the BIST given the generally positive sentiment in Asian markets and the 0.3% increase in U.S. futures that are reversing the c.0.2% overnight gains after the time we left last Friday. We kindly remind that the BIST indices will be adjusted this morning by dropping off two digits via division by 100, so the BIST100 index will start the new week at 1192.02.