Turkey Wake-up call: Macro, Political and Equity News, 29th June

BIST retreated 1.54% yesterday as morning gains were reversed in the afternoon with further selling during the last hour of the session, leaving traders searching for an explanation. Banks lost 2.25% on average as they underperformed the headline index in their fifth consecutive day of declines. THYAO, PGSUS, YKBNK, KRDMD, FROTO, TUPRS, OYAKC, HEKTS, ASELS, NTHOL, and Koza Group stocks topped the crowded list of decliners while ARCLK, EKGYO, BIMAS, TURSG, AGHOL, GOZDE, ECILC, and SELEC stood out among the rare gainers in the BIST100 space. Coming to this morning, our local macro agenda involves BRSA's banking industry aggregates for May'22 due at 2PM local time. Cumulative industry profits stood at TL4.03bn in May'21 and at TL34.94bn in April'22. We foresee a flattish start for the BIST as Ankara's lifting of its veto over Finland and Sweden's bid to join NATO may balance out the sour sentiment in global markets. U.S. futures are slightly positive in early trades in partial recovery of the 1.8-2.1% overnight losses after we left and Asian bourses are almost all trading in the red. Turkish investors will also eye any announcements from the planned meeting (expected to be starting at 6:45PM local time) of President Erdogan with his American counterpart Biden on the sidelines of NATO meeting in Madrid today.