Turkey has encountered an economic crisis recently which led to a plunge in Lira. The US tariff sanction is only the trigger point for the crisis. The main reason is that Turkey's financial position is fragile, with high national debt and relatively low foreign exchange reserve. In recent years, the Turkish government stimulated economic growth by implementing easing monetary policy which caused serious inflation. When the sanction weakened market confidence, which caused a plunge in Lira, the debt crisis emerged. In addition, Turkey’s strong GDP growth in recent years is due to the fact that local governments, banks and enterprises have used large amounts of USD-denominated bonds to stimulate domestic consumption and thus stimulate economic growth. The market concerns the crisis will spread over to other emerging countries, and thus causing market capital to flood into USD denominated assets, which further strengthen the dollar and putting more pressure on emerging market. Insufficient foreign exchange reserves in Turkey causing investors to further withdraw capital from the country as they concern Turkey will have difficulty repaying foreign debts, creating a vicious cycle. Besides, Turkey has a very close and stable relationship with European and Asian companies, investors worried that the crisis could have a kind of contagion effect to the rest of the world and triggered the sell-off on European and Asian stock markets and currency markets. In particular, as the USD remains strong, USD/CNY has crossed the important level of 6.9 earlier today, which further weighed on the already poor performing China’s equity markets and HK equity market. The risk aversion fears continue to dominate HK stock market in the earnings season, as we saw so many companies had their prices crashed even with a beat-consensus financial results. With the US-China trade war concern continues and worsening Turkish crisis, investors are suggested to employ a defense strategy such as overweighting Utilities, local banks and local property management companies.