BUX volatile in thin trade

Telco

The Budapest Stock Exchange's main BUX index finished down 0.54% at 17,037.95 Tuesday, after falling 0.97% Monday. It is down 8.22% from the end of last year, after it rose 2.15% in 2013. European market tailwinds mixed with local headwinds resulted in volatile, cautious trade Tuesday on the Budapest parquet, with the BUX oscillating in and out of red in narrow range for most of the day. The main index fall, however, steepened at the end of trade.

Magyar Telekom corrected up after falling to an almost five-month low on Monday on the governments plan to levy a special tax on internet services next year. A bill in parliament to cap the tax also helped.

The impact could be even heavier than the mere weight of the tax in terms of a new confrontation line between Hungary and the EU, as shown by a comment Tuesday of a European Commission spokesperson, who said the planned internet tax was part of actions limiting freedoms in Hungary.

The government also plans a host of other new or higher special taxes on everyday staples from soaps and deodorants to detergents to stationary goods, and to credit card purchases, which are likely to further hurt household consumption.

Meanwhile, pensions will rise 2.2% next year, the minister of human resources said Tuesday. The rise is short of market expectations, implying that the government expects inflation to be slower next year than previously thought.

MOL suffered again the effects of the ongoing power struggle over its Croatian peer and subsidiary, INA, as the junior stakeholder Croatian government filed INA a request for alleged tax debts on Tuesday, the second time in two years.

OTP lost 0.72% to HUF 4,005 on turnover of HUF 2.18bln from a HUF 3.75bln session total, less than half the daily average this year. MOL slid 1.12% to HUF 11,510 on turnover of HUF 526 mln. Magyar Telekom gained 0.30% to HUF 331 on turnover of HUF 126 mln. Richter advanced 0.03% to HUF 3,690 on turnover of HUF 833 mln. The bourse's mid-cap BUMIX went out 0.75% lower at 1,444.68.

Elsewhere in the region, Warsaw's WIG20 was up 0.63%. The market in Prague was closed for a public holiday. Western Europe's major indices were all up ahead of their close Tuesday, FTSE-100 in London 0.59%, DAX30 in Frankfurt 1.79%, and CAC40 in Paris 0.42%.

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