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Benchmark Equity Index Sheds ~4% Following Weeks of Gains

TURKEY
  • Turkey’s benchmark equity index has traded sharply lower and sits close to 4% lower on the day. The decline follows a notable rally in recent weeks, primarily led by banking stocks, with the index seen printing a fresh multi-year high on Monday.
  • The 14-day RSI on the BIST 100 Index has been above the overbought 70 threshold since July 25 through Thursday, likely exacerbating the sell-off.
  • Comments from Simsek, who has stressed that easing credit conditions will arrive in the coming months along with a slowing of inflation, provided support to Turkish equities which have been rallying since the elections in May. Moody’s recent upgrade of Turkish banking stocks from ‘Negative’ to ‘Stable’ provided an additional tailwind.

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