BUX down on Greece hiccup

In line with European peers, the Budapest parquet turned south in the afternoon on news that a euro zone deal on Greece can not be taken for granted after it seemed to be within reach in the previous two days.

The CEE regionsʼ economic and financial ties with Greece are few, so a failure is unlikely to rattle these countries, but investorsʼ sentiment still reflects anxiety radiating from euro zone markets.

Fresh final data on Hungaryʼs first quarter current account with a sharply improving surplus that pushed the countryʼs net financing capacity to a record high did not impress investors as the current account, however, came in short of some expectations. The data are also history, so they rather just reminded the market to the subsequent, April, preliminary monthly current account, which last week came in with a surplus about half of that in March, due to a trade surplus less than a third of that in March, a net outflow of direct investments instead a net inflow in March, and EU transfers narrowing to less than a third of those in the previous month.

Initially received positively, the National Bank of Hungaryʼs (MNB) base rate cut on Tuesday and its guidance on still more easing to come also raised second thoughts. With inflation picking up, real interest rates could soon turn negative, denting further the moribund market based corporate lending disposition of banks in an economy where consumer confidence is also declining fast, shown by the June survey of GKI-Erste, which was published on Wednesday.

News headlines abroad on Hungary "flouting European asylum rules" or Hungary "drawing European ire as (Prime Minister) Orban suspends accord on refugees" did not contribute to investorsʼ confidence either.

OTP lost 1.33% to HUF 5,550 on turnover of HUF 4.44 bln from a HUF 7.10 bln session total, less than two-thirds of the daily average this year.

MOL dipped 0.03% to HUF 14,450 on turnover of HUF 929m.

Magyar Telekom dropped 1.47% to HUF 402 on turnover of HUF 417m.

Richter retreated 0.28% to HUF 4,230 on turnover of HUF 1.25 bln.

The bourseʼs mid-cap BUMIX went out 0.68% lower at 1,653.41.

Elsewhere in the region, WIG 20 in Warsaw was up 0.43%, while Pragueʼs PX fell 1.34%.

Western Europeʼs major indices were mixed ahead of their close Wednesday, with FTSE100 in London up 0.23%, DAX30 in Frankfurt down 0.71%, and CAC40 in Paris down 0.31%.