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Hungary leads Central European stock gains on peaceful protest

Hungarian stocks rose, leading gains in central Europe, after a peaceful protest to mark the anti- communist uprising in 1956 eased concern of further violent agitation against Prime Minister Ferenc Gyurcsány's government.

OTP Bank Nyrt, the country's largest lender, and Gedeon Richter Nyrt led the advance. Budapest has been disrupted the past six weeks by violent protests triggered by revelations that Gyurcsány lied about the economy to win re-election. “The cooling of the political situation adds to investors' confidence,” said Jenő Nagy, who manages about $2.9 billion at ING Investment Management in Budapest. “The market has underperformed the region in the past month.” The BUX Index climbed 1.9% to 22,550.25, its biggest increase in a month, as of 12:47 p.m. in Budapest. Austria's ATX Index gained 0.7% and Poland's WIG20 Index rose 1.1%. The Czech PX Index added 0.4%. The NTX Index of 30 companies in the region added 1.3% to 1674.28 in Vienna. Bwin Interactive Entertainment AG, an Austrian Internet bookmaker, jumped after the London-based Times said PartyGaming Plc may bid for part of the business. Hungarians gathered peacefully on streets November 4 to mark the day in 1956 when Soviet troops entered the country to crush the anti-communist uprising, easing concern among police and the government over a resumption of violence that has rocked the city in recent weeks. The BUX advanced 2.9% last month, compared to a 7.5% increase in the regional NTX Index and the WIG20's 6.4% gain.

Investors have sold holdings in Hungarian stocks in the past two months on concern that Gyurcsány would resign, stalling plans to cut the biggest budget deficit in Europe. He admitted in September to lying about the economy to win a second term. Demonstrations degenerated into riots, peaking on the October 23 anniversary of Hungary's 1956 uprising. OTP, which spent more than $2.2 billion in the past five years buying 10 banks from Bulgaria to Russia, rose 2.3% to Ft 7327. The lender may say November 14 that net income increased to Ft 46.1 billion ($226 million) from Ft 40.9 billion a year earlier, according to an estimate by Erste Bank. Gedeon Richter Nyrt gained 2.7% to Ft 42,600 Eastern Europe's biggest drugmaker may say that Q3 profit rose 3.6% to Ft 11.4 billion on increased drug sales to Russia, according to the median estimate of five analysts surveyed by Bloomberg News. Budapest-based Richter said it will report earnings during the week beginning November 6. Bwin rallied 5.3% to €16.80.

PartyGaming, a UK online poker company, may bid for part of Bwin.com, the Times reported on November 5, without saying where it obtained the information. Bwin is one of a number of companies PartyGaming Plc is considering, the newspaper said. Karin Klein, a spokeswoman for Bwin, said the bookmaker is not in talks with PartyGaming regarding a takeover. PartyGaming spokesman Edward Bridges declined to comment. KGHM, which mines more copper in Europe than its competitors, advanced 1.4% to 107.3 zloty. Copper futures rose in Shanghai as buyers in China, the world's largest user of the metal, increased purchases after prices touched a two-month low. Copper for delivery in January on the Shanghai Futures Exchange gained as much as 0.5% to 68,000 yuan. PKO Bank Polski SA fell 1.7% to €39.31 Employees of Central Europe's largest lender gain the right to sell 105 million shares they hold, or a total stake of 10.5%. (Bloomberg)