BUX weak in pre-Fed trade


The Budapest Stock Exchangeʼs main BUX index finished down 0.09% at 21,107.42 Wednesday after sinking 0.43% Tuesday. It is up 26.89% from year-end, after losing 10.40% last year.

The Budapest parquet continued to lag behind, while euro zone peers carried on rising as fears from the possible Thursday US rate hike abated on growing hopes that it will, after all, not come about now especially in view of another set of very weak US inflation data Wednesday afternoon, or on expectations that if tightening still happens, it could be a sign of strength of the US economy.

Recent data on euro zone foreign trade showed worries for China might have been exaggerated, and a vice president of the European Central bank (ECB) re-confirmed on Wednesday there was "scope" for more money printing by the ECB after final inflation in the common currency zone came in lower than the preliminary reading, but nothing could lift BUX.

Foreign investors outnumbering locals are pondering a warning from the World Bank which said a rise in market expectations for US interest rates, even if the move is postponed now, could cut capital inflows to emerging markets by as much as 45%, even if analysts say Hungary might be relatively well cushioned against a backlash.

Bad international press on Hungaryʼs handling of the refugee crisis, arguments appearing on official level in Germany and the EU that EU funds for Hungary could be curtailed in response, surveys seeing logistic problems later at foreign-owned Hungarian auto and engine manufacturers if border controls in Hungary, Austria and Germany to cope with the refugee influx remain in place for a long period of time, multiplying projections of GDP-growth to slow in Hungary this year and next, partially confirmed on Wednesday by data on annual growth in construction almost grinding to a halt in July and contracting compared to June in the third monthly decline this year, and fresh signs of the governmentʼs traditional ill will towards certain foreign companies all contributed as well to the low mood in the Budapest marketplace.

Retail customers that Hungaryʼs state-owned utilities company ENKSZ takes over from previously foreign-owned electricity distributors which have been bought out by the sate recently, will have to settle their unpaid bills with their former service provider, the government said.

Weak sentiment can also be attributed to the scarcity of information while all forms of media focus but on the refugee crisis these days in and outside Hungary with economic and market news squeezed out for lack of capacity, analysts add.

OTP lost 1.01% to HUF 5,380 on turnover of HUF 2.22 bln from a HUF 7.48 bln session total, nearly a fifth short of the daily average this year.

MOL dropped 0.42% to HUF 13,000 on turnover of HUF 2.41 bln.

Magyar Telekom ended the day unchanged at HUF 396 on turnover of HUF 356m.

Richter, expecting green light for one of its drugs in the US, advanced 1.63% to HUF 4,360 on turnover of HUF 1.45 bln.

The bourseʼs mid-cap BUMIX went out 0.61% lower at 1,604.01.

Elsewhere in the region, WIG 20 in Warsaw was down 0.19%, while Pragueʼs PX raked up 0.10%.

Western Europeʼs major indices were all up ahead of their close on Wednesday, FTSE100 in London 1.38%, DAX30 in Frankfurt 0.27%, and CAC40 in Paris 1.48%.

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