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BUX hovers around breakeven

Telco

The Budapest Stock Exchangeʼs main BUX index finished down 0.16% at 22,445.82 Thursday, after rising 1.65% Wednesday. It is up 34.94% from year-end, after losing 10.40% last year.

In line with European peers, the Budapest parquet lost momentum on Thursday, hovering around breakeven for most of the day and turning into permanent, albeit light, red late afternoon, as both foreign and local news signaled need for caution.

Emerging stocks globally fell to seven-week lows on Thursday as fears Chinese regulators could bring in measures to curb leverage triggered the steepest one-day drop since January in Chinese shares.

The "Greek drama" continues to spook markets and headlines over a "deal or no deal" are leading the general sentiment.

Confidence in the euro zoneʼs economy stabilised in May after a strong start to the year, the European Commissionʼs monthly economic sentiment indicator showed. But some further sentiment improvements in industry, services, and among retailers were sharply contradicted by falling confidence among consumers, mainly on expectations of rising prices.

Locally, investment volume in Hungary fell 4.5% year-on-year in the first quarter after growing 1.9% in the fourth quarter of 2014, and up 14.0% on average over last year, fresh official figures showed. Construction investments fell 8.9% and investments in machinery, equipment and vehicles were down 1.0%.

OTP still shone after heavy buying of own shares last week, and after the National Bank of Hungary (MNB) decided on Wednesday that the high level of its foreign-currency reserves makes it possible for commercial banks to close their unlimited forint-euro swap deals, related to the mandatory conversion of household forex mortgages into forint debt, sooner than planned. Closing the swap deals sooner than maturity could help banks improve their books, reduce their external indebtedness, and the central bank to narrow its balance sheet, the NBH said.

The BUX was also underpinned by around 6% rises of low-weight power distributors ELMU and EMASZ on rumors the government was intent on expanding its share in both companies by buying into, or even buying out, the stakes of Germanyʼs RWE.

OTP won 1.22% to HUF 5,729 on turnover of HUF 4.68 bln from a HUF 7.84 bln session total, three-quarters of the daily average this year.

MOL lost 0.60% to HUF 14,915 on turnover of HUF 1.87 bln.

Magyar Telekom ended flat at HUF 416 on turnover of HUF 71 mln.

Richter retreated 1.62% to HUF 4,565 on turnover of HUF 1.08 bln.

The bourseʼs mid-cap BUMIX went out 0.57% lower at 1,584.52.

Elsewhere in the region, WIG 20 in Warsaw was down 0.74%, while Pragueʼs PX fell 0.45%. Western Europeʼs major indices were all down ahead of their close Thursday, FTSE100 in London 0.11%, DAX30 in Frankfurt 1.03%, and CAC40 in Paris 1.16%.

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