Time to be selective in the stock market | Stock Market News

Investors flock to the stock market in recent months. The search for returns against high inflation, the low earnings of alternative markets, the good performance of the 2022 period balance sheets due to the growth in the economy and high inflation were important factors that attracted investors to the stock market.

Here is this week’s article by Hürriyet newspaper writer Zeynel Balcı…

However, when there was a short-term panic with hard selling on Thursday, the investor saw that the stock market could drop. This fluctuation can also bring about reviewing the situation and being more selective.

Despite the profit sales, optimism and exit trends are maintained in the stock market. It is possible to see the incoming sales in Borsa Istanbul as a technical correction at this stage. The deepening of sales in some of the stocks that led the exit had an impact on the BIST100 Index. However, with other shares taking over the locomotive function, the decline in the index did not continue and was limited. The exit movement, which has been continuing without any serious correction since the last days of September, has been interrupted and caused a short-term panic atmosphere with hard sales last Thursday. It is appropriate to say that investors have seen that the stock market may fall. This fluctuation can bring about reviewing the situation and being more selective. Especially in recent months, it will be necessary to be more careful in terms of new investors who flock to the stock market.


In the statement originating from the Central Registry Agency (MKK), it was announced that as of November 17, the number of investors with a balance exceeded 6 million. It has been announced that the number of stocks is 3 million 48 thousand people, and 682 thousand new investors have arrived since the beginning of the year. The search for returns against high inflation, the low earnings of alternative markets excluding real estate, the good performance of the 2022 period balance sheets due to the growth in the economy and high inflation are the justifications that attract investors to the stock market. Moreover; It is an accepted issue that the recent developments and losses in the crypto money sector have increased the interest in the stock market, as well as the decrease in the interest in “currency protected deposits (KKM)” due to the horizontal course and declining earnings in the exchange rates for a while.


Investors who have said hello to the market, especially in the last few days, have participated in a premium process. If we define it with the market mouth; It’s been a long time since the train started, and it has come a long way. But questions such as “Is there a last stop, where are we on the road?” may have come to the fore with the sales on Thursday. However, after selling their stocks, there is no serious alternative other than housing that will beat inflation. Although there is a similar situation in housing prices, that sector is not much different from Borsa Istanbul. According to CBRT data; Housing prices increased by 189.2 percent in nominal terms and by 58 percent in real terms in September 2022 compared to the same month of the previous year. The increase for Istanbul was announced as 212.1 percent. For the BIST100 Index, since the beginning of the year, the yield has reached the premium levels of 140-150 percent in the last week. Housing premium is higher. Looking at the balance sheets, there are still premium but not expensive stocks in terms of fundamental data. In this respect, let us underline once again the necessity of “being more selective”, although the positive course is maintained in Borsa Istanbul.


With the decline in the US inflation data in foreign markets, the effects of the expectation that the Fed will slow down the rate hikes began to weaken. Strong US retail data were evaluated as the Fed has a margin for continuing interest rate hikes. In addition, the US weekly jobless claims came in at 222,000, which fell short of expectations, suggesting that the labor market remains strong. As it is known, employment and inflation data have a special importance in terms of Fed’s interest rate decisions. On the other hand, cautious views started to come from the Fed. After the low US CPI data, Fed officials’ “dove” tone statements became a bit hawkish. st. Louis Fed President James Bullard is of the opinion that policy makers should raise interest rates further and that rates should rise to a sufficiently restrictive level to reduce inflation. Minneapolis Fed Chairman Neel Kashkari said it was difficult to know how much the Federal Reserve would need to raise interest rates, but said it should not stop until it became clear that inflation has peaked. “Before I advocate stopping the progress of future rate hikes, I need to be convinced that inflation has stopped escalating,” Kashkari said. We are not there yet,” he said.


Though the Fed’s option to raise interest rates by 50 basis points for its December meeting is still the most likely. On the other hand, President of the European Central Bank Lagarde said, “We expect a further increase in interest rates. Interest rates are and will remain the main tool of our monetary policy stance. The recession is unlikely to significantly reduce inflation. The recession risk is rising,” he said. With these statements, Lagarde actually gave a good roadmap for the future, summarizing the situation and showing his intentions. Despite the decline in the USA, inflation in the global economy remains high. While inflation rates (CPI) were 10.4 percent in Germany and 10.6 percent in the Euro Area, England reached 11.0 percent and Japan 3.6 percent, the highest levels of the last 40 years. In Turkey, the situation is already known. In summary, the fact that the USA has made some progress in inflation does not seem to have convinced the markets after the first positive reactions. At least at this stage.


There is a meeting of the Central Bank of the Republic of Turkey (CBRT) on Thursday, November 24. Expectations are for a 100 basis point cut. The reference point of the market is mostly President Erdogan’s statements in the past months, emphasizing that “interest rates will fall further and single digits”. However, if we take into account that the CBRT frequently surprises with its interest rate decisions, let’s add a note that we still need to see the meeting result. Despite high inflation and the ongoing interest rate hike processes on a world scale, the CBRT continues to cut interest rates in line with the economic policies that prioritize growth. Expectations are that it will stop if it drops to single digits. On the other hand, CBRT data is closely watched. Foreign investors in the week ending November 11; They bought 116.3 million dollars in stocks and sold 28.6 million dollars in bonds and bonds. It is noteworthy that they have been seen on the buying side of stocks and selling on bonds for the last two weeks. On the other hand, foreign share in stocks in Borsa Istanbul continues to be below 30%. Again in the week of November 11, it would be appropriate to take into account the euro/dollar parity in the CBRT gross reserves, which increased by approximately 4 billion dollars compared to the previous week and increased to 117.5 billion dollars, and the rise in the ounce price of gold.


The exit trend in the stock market met with selling. Initial supports are at 4.450-4.400 levels. Above the 4.400 level, the uptrend can be maintained. The next anchor points to be given below this level are at the levels of 4,300 and 4,100-4,000. In upward movements, the first resistance levels that are likely to face selling are seen as 4.600 and 4.800. Next resistances are at 5,000-5,100 points. Although the uptrend in the index is preserved, upward movements may encounter profit sales again.



Source: bigpara- GÜNDEM by bigpara.hurriyet.com.tr.

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