BUX corrects down
The Budapest Stock Exchangeʼs main BUX index finished down 0.19% at 20,893.96 Wednesday after rising 1.29% Tuesday. It is down 2.35% from end-August, and down 4.61% over the third quarter while global emerging market stocks plunged about 20% on average. The BUX is still up 25.61% from year-end, after losing 10.40% last year.
The Budapest bourse corrected down late afternoon after a US private payroll survey, showing continuing and larger-than-expected growth in hiring in September, brought closer the eventuality of the US rate rise.
Initially supported by a strong upturn in Western markets, the BUX has already pared gains in the morning on OTP Bank that slid after a large gain on Tuesday, as the head of the National Bank of Hungary (MNB) urged financial institutions to lend more to the economy at a conference in Budapest on Wednesday. Minding Hungaryʼs financial authoritiesʼ rich record of pressuring banks with "unorthodox" measures which weighed on profitability in the past five years, his encouragement rather perplexed investors, although he suggested, but apparently in a conditional perspective, that central banks would soon need to return to a more traditional regulatory role with lending in the hands of commercial and investment banks.
Net corporate lending of banks grew slightly for a second month in August after falling for four months, while households remained net repayers in August, MNB statistics showed on Wednesday.
Hungaryʼs government could consider lowering the general 27% VAT rate on home construction to boost investments, the national economy minister said in a newspaper interview on Wednesday.
Other news capping the BUX on Wednesday included data on producer prices in Hungaryʼs industry falling 0.5% in August from the preceding month after a drop of 0.7% in July, and decreasing 0.8% from August last year after rising 0.3% annually in July, bringing the year-to-date annual deflation to 0.8% compared to the first eight months of last year.
Hungary slipped to the 63rd place in the latest ranking of 140 countries based on competitiveness compiled by the World Economic Forum, released on Wednesday. Hungary fell three spots in the annual ranking which included 144 countries a year earlier.
The Czech and Hungarian economies will probably be the hardest-hit by the Volkswagen emissions scandal among eastern European nations, Bank of America Corp. said in a note on Wednesday.
In a worst-case scenario, the fallout may shave between 1% point and 1.5% points off the Czech and Hungarian economic growth and current accounts, BofA said, and added the Hungarian central bank was the most likely to react to the scandal’s potential drag on economic growth by easing monetary conditions.
OTP lost 1.33% to HUF 5,405 on turnover of HUF 4.04 bln from a preliminary HUF 8.50 bln session total, nearly a tenth short of the daily average this year.
MOL gained 0.49% to HUF 12,220 on turnover of HUF 1.46 bln.
Magyar Telekom rose 1.04% to HUF 390 on turnover of HUF 136 mln.
Richter ended flat at HUF 4,455 on turnover of HUF 2.77 bln.
The bourseʼs mid-cap BUMIX went out 0.18% higher at 1,619.06.
Elsewhere in the region, WIG 20 in Warsaw was up 1.14%, while Pragueʼs PX gathered 1.22%.
Western Europeʼs major indices were all up ahead of their close on Wednesday, FTSE100 in London 2.36%, DAX30 in Frankfurt 2.38%, and CAC40 in Paris 2.66%.
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