Usman Salis
Investor optimism surged this week as Turkey’s BIST Banks Index broke key resistance levels, fueled by softer-than-expected inflation data and speculation over a potential interest rate cut in July. The rally was also driven by the postponement of the CHP court case, easing short-term political pressure.
Turkish Banks Rally on Policy Shift and Inflation Surprise
Turkey’s BIST Bank Index (XBANK) surged by 12.87% to close at 15,821.34 following a key breakout above the “Importante” resistance level. The rally comes on the heels of softer-than-expected inflation data and news that the CHP court case has been postponed until September, which temporarily eased investor uncertainty.
The breakout took the index above the Fibonacci 0.618 level at 15,261.33, setting its sights on higher resistance around 16,125.22 and potentially 16,930.09. Optimism is also being driven by expectations of a central bank rate cut in July, marking a possible shift in monetary policy that could further stimulate banking sector performance.
Risks Remain Amid Political Uncertainty
While the technical picture appears bullish, the tweet also notes that political risks remain the primary downside concern. Over the weekend, the politically motivated arrests of several CHP-affiliated mayors raised eyebrows in the investor community. Additionally, July’s inflation print may worsen due to public sector price hikes, potentially undermining monetary easing efforts.
Despite these headwinds, Turkish banks have shown relative resilience, and if the rate-cut cycle begins smoothly, the positive momentum could persist. However, as the post cautions, “no one can say for sure” how political instability might disrupt the trend.
Usman Salis
