The Budapest main index made an orderly tactical retreat from a second four-and-half-year high within four trading days on Monday as global markets anxiously weighed the economic repercussions of higher terror alert in Europe, and new risks after Turkey shot down a Russian fighter plane at the Turkish-Syrian border. The mix of increased geopolitical uncertainty hitting financial services, trade and tourism, and the certainty of a US rate hike in December is not exactly a health potion for markets, analysts say.
The US tightening was quasi certified on Tuesday by second-reading data on a much smaller-than-expected slowdown in US GDP growth in the third quarter, and larger-than-expected inflation pressure, despite dropping company profits.
On the home turf, investors may have been perplexed by some aspects of the National Bank of Hungary (MNB) raising its stake from 7% to a 75.8% majority in the Budapest Stock Exchange (BSE) company as it is equivalent to a nationalization of the marketplace, a rare occurrence in global history, and another sign of the stateʼs inroads into private business following earlier buy-outs of two commercial banks and a number of public utility companies.
Moreover, the central bank said its aim with the acquisition was to “adequately regulate the capital market”, and added that in cooperation with the government it will work out a new strategy for BSE by early next year.
Analysts add that MNB governor Gyorgy Matolcsy is an old battle companion of Prime Minister Viktor Orban and a mastermind behind some of the Hungarian governmentʼs unorthodox market-bending policies.
Only safe heaven drugmaker Richter stood out with further gains.
OTP lost 0.17% to HUF 6,030 on turnover of HUF 4.67 bln from a preliminary HUF 10.68 bln session total, nearly a fifth above the daily average this year.
MOL fell 2.00% to HUF 13,490 on turnover of HUF 856m.
Magyar Telekom dipped 0.97% to HUF 407 on turnover of HUF 127 mln.
Richter advanced 0.99% to HUF 5,300 on turnover of HUF 4.87 bln.
The bourseʼs mid-cap BUMIX went out 0.32% higher at 1,633.09.
Elsewhere in the region, WIG 20 in Warsaw was down 1.69%, while Pragueʼs PX sank 1.65%.
Western Europeʼs major indices were all down ahead of their close on Tuesday, FTSE100 in London 0.60%, DAX30 in Frankfurt 1.58%, and CAC40 in Paris 1.62%.
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