Turkey Wake-up call: Macro, Political and Equity News, 2nd August

BIST added 0.09% on Friday, eking out a small gain at the closing session after spending the entire day in the negative territory and carrying its weekly gains to 3.06%. Banks finally outpaced the broader market with the 1.56% gain for their sector index after eight consecutive days of underperformance. ASELS, FROTO, KARSN, TRGYO, ISMEN, AKSEN, BRISA, and HEKTS led the non-bank gainers for the day while KOZAL, TAVHL, PGSUS, ARCLK, ODAS, and GLYHO were some of the weak spots. Coming to the start of the new month, our local macro agenda involves July'21 PMI that will be announced at 10AM local time. The index had jumped 4.1% on a sequential basis to 51.3 in June following loosening of the lockdowns, returning back to expansion territory after its first slip below the 50-neutral level in a year in May. A positive start is in the cards for the BIST given the upbeat mood in global peers as some of the concerns on China's regulatory crackdown eased while the weakness in lira (USDTRY at 8.47 levels vs 8.4307 at Friday's closing bell) may create some headwinds. U.S. futures are up 0.5% while Asian markets are almost all trading in the green.