BUX resilient despite Fed fears, local scares

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The Budapest Stock Exchange's main BUX index finished up 0.06% at 18,380.68, a twelve-day high, Tuesday after rising 0.47% Friday. It is up 10.50% from year-end, after losing 10.40% last year. Amid a global fall, the Budapest parquet could still eke out a small rise, again mainly on OTP supported by analysts upgrades since better-than-expected Q4 results published last Friday.

However, fears of an earlier-than-thought Fed rate hike counterweighed the expected beneficial effects on emerging market assets from the ECB's QE which started on Monday.

Local scares included an endemic suspension of licences of brokerages by the National Bank of Hungary (MNB)on charges of irregularities.

Fresh inflation data out Tuesday also came in with a mixed message. Consumer prices fell in February for the sixth straight month year-on-year, albeit deflation eased more than expected. However, Takarekbank forecast Hungary's average CPI to remain slightly below zero overall this year.

Meanwhile, core inflation accelerated after a 12-month slowdown.

As headline figures weigh on wages, pensions and social allowances, smaller rises in household income coupled with faster rising core inflation could result in consumption being less affordable for many people. This, in turn, could shave off several tenths of percentage points from GDP growth, and limit revenue and profit growth for listed companies, while investment, manufacturing and export growth is also to slow due to base effects, economists reckon.

OTP gained 1.30% to HUF 4,585 a nine-month high, on turnover of HUF 9.74 bln from a HUF 11.77 bln session total, two-fifths above the daily average this year.

MOL ended down 1.25% at HUF 11,850 on turnover of HUF 773 mln.

Magyar Telekom rose 0.26% to HUF 392 on turnover of HUF 471 mln.

Richter retreated 0.19% to HUF 3,725 on turnover of HUF 584 mln.

The bourse's mid-cap BUMIX went out 0.04% lower at 1,514.03.

Elsewhere in the region, the WIG 20 in Warsaw was down 1.33%, while Prague's PX lost 1.22%. Western Europe's major indices were all down ahead of their close Tuesday, FTSE-100 in London 2.10%, DAX30 in Frankfurt 0.52%, and CAC40 in Paris 0.90%.

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