Turkey Wake-up call: Macro, Political and Equity News, 4th December

BIST added 0.40% yesterday after a day of ups and downs in a 20-point range. Higher than expected November inflation print led to a sell-off in the first 30 minutes of trading, however benchmark BIST100 found support around at the 1,315 level and clawed its way back into positive territory soon after noontime. Rest of the day saw the market trading in positive territory where it managed to close. Banks underperformed with the 0.68% drop in their sector index amid pressure on TSKB and YKBNK. Strength in some non-banks like TCELL, BIMAS, AEFES, ARCLK, KCHOL, SISE, YATAS, and SELEC kept the broader market afloat while automotive stocks, cement producers, NETAS, MPARK, and ENJSA topped the laggards. Today, our macro agenda involves Central Bank's November'20 real effective FX rate due at 2:30PM local time. The CPI-based index is expected to stage some recovery from the 60.66 mark - lowest ever print in the series dating back to 1994 - for the previous month given ~5.1% appreciation of lira vs the currency basket as well as the 2.30% headline CPI print for November. Separately, Moody's has a scheduled review of Turkey's sovereign rating for today and any related announcements are expected to be released after markets close. The 12 economists surveyed by Foreks unanimously predict Moody's to affirm its B2 rating (five notches below the investment-grade and also one and two notches respectively below those set by major rival agencies S&P and Fitch). 7 of the survey participants predict the Negative outlook to be maintained while 4 expect an upgrade to Stable and 1 calls for a change to Positive. BIST seems off to an uptick start given similar moves in Asian peers as well as S&P futures while the pull-back in lira (USDTRY at 7.8070 vs 7.7709 at yesterday's closing bell) after yesterday's gains may create some headwinds.