BIST 100 index in Borsa Istanbul reached its highest level in the last month with the opening balance sheet season, very cheap valuations and purchases that have been effective since yesterday in bank shares. Strategist Cuneyt Paksoy said, “We observe a structure in the BIST 100 index, in which the opportunities brought by cheapness based on many other criteria, primarily dollar-based, and the basic scenario, which manifests itself with good balance sheets supported by the growth story, come to the fore. As long as the BIST 100 index technically stays above 1.400-1,435, the broad band of 1.450-1490 will be an important resistance threshold.”
After the BIST 100 index followed a fluctuating course in the 1.375-1.400 band for a long time, it is seen that the selling pressure has decreased since last week. Yesterday, the BIST 100 index rose to its highest level since September 16 with 1,434.67 points, while the appreciation in bank shares was remarkable.
While the banking index showed its best daily performance since 31 August with an increase of 2.52% yesterday, it was noteworthy that it maintained its positive outlook today.
BIST 100 index, which saw the peak of the last month yesterday and completed the day just below 1,430 points, is just above the 1,430 level by continuing the upward trend of yesterday, albeit to a limited extent, in the first half of the new day.
While the announcement of the third quarter balance sheets around the world continued, the fact that the profitability of the companies was above the expectations was one of the main factors supporting the global stock markets.
Increasing inflationary pressures, problems in the supply chain, energy supply security and rising long-term interest rates continue to be risk factors on global stock markets.
Analysts noted that global stock markets are moving in an upward trend with diminishing uncertainties in monetary policies and strong balance sheets, and reported that the increasing risk appetite reflected positively on domestic markets as well.
Cuneyt Paksoy, AA Finance Analyst and strategist, told AA correspondent on the subject, “BIST 100 index quickly recovered from the important support levels, accompanied by the US stock markets, and entered a short-term correction trend.”
Noting that the dollar index and the US 10-year bond interest continue to be at critical levels in the current situation, Paksoy pointed out that commodity prices, especially oil, that will trigger the inflation process, continue to rise.
Emphasizing that the reason for the recovery in the stock markets is the fact that the US Central Bank (Fed), European Central Bank (ECB) and other large-scale central banks will not go through tightening quickly, Paksoy said, “There are guidelines on how the process will be managed in a controlled manner, the recovery experienced despite the continuation of the new type of coronavirus (Covid-19) process in the balance sheets, and the usual year-end return expectations in the funds are technically supportive.”
“THE BIST 1.450-1,490 IS CRITICAL IN BIST 100 INDEX”
Noting that the eyes will continue to be on the Fed and the ECB, as it has the power to affect the dollar index and US bond yields, Paksoy noted the following regarding the domestic markets.
“In the BIST 100 index, we observe a structure in which the opportunities brought by the basic scenario, which manifests itself with good balance sheets supported by the growth story, and the cheapness based on many other criteria, primarily dollar-based, stand out. The BIST 100 index, which wants to return to the rise again after retreating around the 200-day averages, is currently trying to move towards the important resistance zone above the 1.400s.”
Paksoy stated that the upward movement in the BIST 100 index will be tried to be confirmed in parallel with the future course of global markets and the effects of the developments in exchange rates and bonds after the decisions of the Central Bank of the Republic of Turkey (CBRT) on the banking index.
Mentioning the situation of retreating to the lower supports due to cautious optimism, Paksoy stated that the potential of permanent crossing of the 1.450-1,490 resistance band, which is the critical resistance zone and the potential for the end of the squeeze that has been going on for months, is very important as well as the working power of the supports.
Paksoy continued his evaluation as follows:
“As long as the BIST 100 index technically stays above 1.400-1,435, the broad band of 1.450-1490 will be an important resistance threshold. If this band is exceeded, it will pave the way for new record levels. As long as possible retracements remain below 1.400, the 200-day exponential average of 1.390 will be followed in the first place.
“WE SEE THAT THE INTEND IS TO RISE IN THE BIST 100 INDEX”
Baki Atilal, Deputy General Manager of Investment Research at A1 Capital, said, “Although there was a slight weakening in short-term indicators after the fluctuation in the BIST 100 index last week, we see that the upward intention is preserved.”
Pointing out that they expect a 100 basis point rate cut at the Monetary Policy Committee (MPC) meeting of the CBRT, Atılal said that although this situation increased the volatility in the Turkish lira and caused an upward movement in the 10-year bond-bill rates, the upward trend in the BIST 100 index continued.
Atılal stated that the retracement of the dollar rate from the 9.37 levels seen yesterday and the partial decrease in volatility provided support for the upward completion of the squeeze movement in the index.
Pointing out that staying above the 1.407 support in the BIST 100 index is important for its short-term outlook, Atılal stated that 1.432 points is the first intermediate resistance and if this level is exceeded, 1.457 points is an important resistance point.
Noting that another factor that keeps the BIST 100 index strong is the strong expectations for the company’s profitability in the third quarter, Atılal made the following assessments:
“The recovery in the aviation sector data, the effect of the high course in the final product prices, the contribution of the increasing demand and capacity utilization rates to the financials of the iron-steel and petrochemical companies, the increase in the loan growth rate in the banking sector, the improvement in the adjusted net interest margins, the positive effect of the increase in the CPI-indexed bond yields, the strong operational performance in the real estate investment trust sector, the improvement in the margins of energy companies help the BIST 100 index to remain reluctant to pullbacks, but keep the upward intention ready.”
Source: Sabah / Translated by Irem Yildiz