The cards are reshuffled in the bag – Dünya Gazetesi

Ufuk KORCAN

Central banks also left their mark on the week we left behind. As expected from the US Federal Reserve (Fed) interest rate decision meeting, which was eagerly awaited around the world, an interest rate hike of 75 basis points came out. Following the decision, President Powell’s remarks were well received in the markets, while purchases were made in risky assets such as stocks and cryptocurrencies. Well, were the explanations really the kind that put the markets at ease? Not really. But the markets still heard what they wanted to hear.

The market knows how to take advantage!

The Fed, which has cut interest rates to the 2.25-2.50% range, has given the message that the increases will continue. So much so that Powell has dismissed claims that the economy is in recession, saying there could be an unusually large increase at the next meeting, but that decision will depend on the data. In other words, the rate increase will continue until inflation is brought under control. However, Powell’s statement that ‘the rate of increase in interest rates will eventually decrease’ was anticipated by the markets. As if the rise in interest rates would last forever, there was a clarification with this speech! But as I said before, markets always hear what they want to hear in such statements. Not a small number of those who think that the markets’ first reaction to Powell’s statements is ‘exaggerated’. For example, according to Morgan Stanley Chief Strategist Mike Wilson, investors were “in the mood” a little earlier.

Inventory preferences are changing

Let’s go to the country… Internally, the Central Bank of the Republic of Turkey (CBRT) Inflation Report was closely monitored. The Central Bank raised its inflation forecast for 2022 from 42.8% to 60.4%. Considering the statements made, the current monetary policy will continue. For those who don’t want to invest their money in risky assets, the Currency Protected Deposit (KKM) continues to hold its appeal.

For those who want to protect their savings against inflation, the action remains at the top of the preference list. However, after the developments, there are changes in stock preferences in the first half of the year. Especially after the Russia-Ukraine war, gas shortages in Europe and the European Central Bank’s (ECB) interest rate hikes strengthened recessionary expectations for the Eurozone. Investment bank Goldman Sachs has predicted that the euro zone will enter recession in the second half of the year.

What actions stand out in the second half?

Having completed the first half of the year with an appreciation of 38 percent, Borsa Istanbul has positively differentiated itself from the stock exchanges of other countries with this performance. The increasing profitability of Turkish companies, mainly in industry, was effective in this performance. However, the second half can be a little more difficult. Especially the Eurozone, where there are recession concerns, could negatively affect the growth of companies exporting to this region as it is Turkey’s biggest export market. However, the ongoing inflationary environment and expectations of high exchange rates will once again keep the company’s shares with a foreign exchange surplus in the foreground. Downward pressure on commodity prices excluding oil and food from a global recession could also negatively affect profitability in this segment. While there are recession concerns abroad, there is no expectation of recession in Turkey at the moment.

Magnified Gedik target

As such, food inventories and food retail may continue to attract interest, with domestic demand expected to remain buoyant. Gedik Investment, which raised its index target from 3,081 to 3,500 as a result of the company’s continued strong growth and inflationary environment, sees upside potential of 45% in banking and 37% in industry.

Critical level in the stock market: 2,354

The BIST100 index continues its uptrend, which started at 1,371 points on October 4, 2021 on the weekly chart. So far it has been seen that the support point is working thanks to 2,354 points. This is horizontal and the aforementioned uptrend support point for this week. For this reason, even if there is a floating price trend in the index, it can be said that the direction is bullish as long as the trend is above the support point of 2.354 points for this week. If momentum continues, there is potential for a rally to 2,780 points on the index, with 2,593 points as the midway point of resistance. In the downside scenario, getting below the support points mentioned above can increase the risk of testing 2,279 supports in the first stage and then 2,197 supports.

Will the dollar continue to rise?

Staying above 17.07 TL on the weekly chart is the most basic indicator that technically explains the rise in the USD/TL parity. Therefore, to talk about parity relief, prices below the 17.07 TL level should be formed as a priority. However, even if this scenario comes to fruition, it should be borne in mind that the pair is still in an uptrend that started on January 3, 2022. The support point of this trend coincides with the 15.96 TL level. Below this level there is a horizontal support point at the level of 15.73 TL. If these levels are passed on, a pullback can be seen in the parity up to the 14.47-14.85 TL band. In the downside scenario, staying above the 17.07 TL level will increase the risk of testing the 18.25 TL level at par.

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