Equities: Do Not Underestimate Political Risk

Risk aversion linked to a potential political crisis in Turkey has hammered the equity market, with the benchmark ISE-100 index falling 7.4% in under four days. Worryingly, the index has now smashed through the 50 and 100-day moving averages on the daily chart and broken through short-term trendline support at 52,000. The ISE-100 is now testing a key psychological level at 50,000, a firm breach of which, confirmed by a close on the weekly chart, would set the stage for a move to subsequent support and the 200-day moving average at 46,000 (8% losses from the current level of 49,794).

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