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BUX takes a fall

The Budapest Stock Exchange's main BUX index opened down 4.26% at 21,537.83 on Monday as markets gave a negative response to the suspension of the talks between the government and the International Monetary Fund and the European Union at the weekend.

OTP Bank dropped 6.61% to HUF 4,800, oil and gas company MOL fell 4.30% to HUF 19,710, drug maker Richter weakened 2.26% to HUF 43,300 and Magyar Telekom lost 3.78% to HUF 662.

    The BUX closed down 1.49% at 22,496.82 on Friday, on turnover of HUF 15.6bn.

    Analysts interviewed by MTI said they expected negative market sentiment and falling shares prices on Monday as talks between the government and the International Monetary Fund and the European Union were suspended at the weekend.

    Roland Kovács of Equilor Investment said he expected a negative response on the share, bond and currency markets. The forint weakened significantly early in the morning, which could put pressure on bank shares, and other shares are also expected to be sold by foreign investors.

    Zsolt Balásy of Concorde Securities said the correction of the rally seen in recent weeks on US markets could lead to a major fall in Budapest along with the fact that the IMF delegation took an early leave from the country.

    CIB Bank's analysis noted that market sentiment already turned sour on Friday on share markets, with both European and US indices closing down, and the negative trend continued on Asian markets on Monday. They also pointed out that the suspension of the talks with the IMF and the EU is bad news for the markets and could adversely influence Hungarian instruments.