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BUX further down from recent peaks

Telco

The Budapest Stock Exchangeʼs main BUX index finished down 1.31% at 23,319.06 Monday after shedding 0.25% Friday. It is up 40.19% from year-end, after losing 10.40% last year. Past a fifth four-and-a-half-year high within two weeks last Tuesday, the BUX sank 0.35% over last week, after climbing 2.54% in the previous week.

While euro zone peers recovered from Fridayʼs three-week lows as they turned a page on the shock caused by weaker-than-expected ECB easing, the Budapest parquet continued to correct down from recent peaks.

The pressure could be a side effect of some weightings reshuffle in global investorsʼ calculations with speculation aiming at developed share markets due to poor return on developed debt in the low interest rate, low yield environment, while falling oil and raw material prices make emerging markets debt risky, analysts say.

In domestic news, the second edition of the National Bank of Hungaryʼs (MNB) annual Growth Report out on Monday projected a reserved growth dynamic in Hungary.

The Hungarian economy could show a potential growth of 2.5% in the medium term, the MNB said. In September the central bank estimated next yearʼs growth at 2.5 percent after 3.6% last year. This year, annual growth decelerated to 2.4% in the third quarter from 3.5% in the first quarter and 2.7% in the second quarter.

World trade, falling short of its pre-crisis dynamics, carries a downside risk to domestic growth, the MNB said. It listed an ageing society as well among risks to potential growth.

Fresh official statistics showed that householdsʼ real per capita income and spending at the end of last year still lagged levels of the years before the global financial crisis. Per capita net income in the richest tenth of society grew 20.7% on average since 2010, but it increased only 5.2% in the poorest tenth, while the middle classes narrowed and sank in relative comparisons, the numbers showed. Consumption spending propensity is more sensitive to income in lower income brackets than in higher ones, so the larger the income inequality the larger the drag on the demand side of GDP growth, economists add.

OTP lost 0.82% to HUF 5,915 on turnover of HUF 2.51 bln from a preliminary HUF 5.75 bln session total, more than a third short of the daily average this year.

MOL fell 1.81% to HUF 13,555 on turnover of HUF 585 mln.

Magyar Telekom dropped 0.72% to HUF 414 on turnover of HUF 222 mln.

Richter retreated 1.70% to HUF 5,310 on turnover of HUF 235 bln.

The bourseʼs mid-cap BUMIX went out 0.51% lower at 1,612.92.

Elsewhere in the region, WIG 20 in Warsaw was down 0.13%, while Pragueʼs PX dropped 0.47%.

Western Europeʼs major indices were mixed ahead of their close on Monday, with FTSE100 in London down 0.24%, DAX30 in Frankfurt up 1.14%, and CAC40 in Paris up 0.78%.

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