BUX closes below intraday high

The Budapest parquet pared gains after the National Bank of Hungary (MNB) cut its policy rate by a more-than-expected 15bps to a new record low of 1.35%, but its head announced this was the end of the easing cycle.

Still outperforming euro zone peers, the BUX slowed on other worries and uncertainties, too, including signs that the MNB is pushing the government to decide swapping forex car loans into forint debts, a possibility that weighed on OTP, and new questions concerning a re-organisation of Hungaryʼs tax authority.

Fresh data showed regular full-time employment growth decelerated in May four the third month in a row in Hungary. Employment growth in the total economy with fostered workers included accelerated, but average net wage growth slowed sharply for the second consecutive month, and growth fell short of the pace a year ago even harder. Real wage growth deceleration was more serious to less than 1.0% in May from 3.9% in April as inflation returned to Hungary in May after eight months of deflation.

In the private sector full-time employment growth quasi stagnated while net wage growth steeply slowed both without fostered workers and fostered workers included, auguring more dire straits for already slowing household consumption growth.

A private survey showed on Tuesday that gross turnover of factoring companies in Hungary rose 35% in the first half from a year earlier, after a 14% expansion last year compared to a 10% average growth in Europe. Partly resulting from OTP Bankʼs entry into the market, the expansion of factoring is hailed by some analysts as a welcome alternative source of bridge-over financing for companies, albeit with a discount to their assets, while market-based corporate lending stagnates or narrows, but others say factoring growth also illustrates the ever spreading inability of companies to pay their debts, and the quickly waning confidence of suppliers in regular payment from their corporate costumers.

Drugmaker Richter shot up in final trades after underperforming the market throughout the day following Novartisʼ weaker than expected second quarter results.

OTP rose 0.02% to HUF 5,900 on turnover of HUF 6.70 bln from a HUF 9.82 bln session total, a tad above the daily average this year.

MOL gained 0.68% to HUF 14,750 on turnover of HUF 1.61 bln.

Magyar Telekom won 0.75% to HUF 403 on turnover of HUF 695m.

Richter advanced 0.63% to HUF 4,327 on turnover of HUF 775m.

The bourseʼs mid-cap BUMIX went out 0.67% higher at 1,680.09.

Elsewhere in the region, WIG 20 in Warsaw was up 0.22%, while Pragueʼs PX garnered 0.71%.

Western Europeʼs major indices were all down ahead of their close on Tuesday, FTSE100 in London 0.37%, DAX30 in Frankfurt 1.19%, and CAC40 in Paris 0.84%.