BUX recovers on ECB optimism

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 0.37% at 22,333.72 Tuesday, after falling 0.63% Monday. It is up 34.27% from year-end, after losing 10.40% last year.

The Budapest parquet followed European peers upwards after shares in China gained sharply on hopes for more government stimulus, and the European Central Bank (ECB) said it would "frontload" its bond-buying programme in May and June to ensure it does not fall behind on its target of a monthly average of EUR 60 bln over summer.


Although officially "unrelated", the ECB move is seen in the market as a response to the recent spike in bond yields which, by raising financing costs, has effectively wiped out the benefits of the ECBʼs QE.


However, the BUX underperformed throughout the day and pared gains towards close as the ZEW indicator fell to a five-month low in May, raising concerns for the economy in Germany, Hungaryʼs largest partner in terms of trade and investment.


Despite oil prices easing on a stronger dollar, MOL also benefited from an expansion of its upstream interests in Pakistan, which it announced on Tuesday.


Magyar Telekom was up also after it announced a rationalisation of its property portfolio.


OTP initially recovered following Standard & Poorʼs after-hours announcement on Monday that it revised its outlooks on its junk rating to "positive" from "stable", but fell later in quick profit-taking as S&P also reminded investors that an eventual upgrade of the rating was still a matter of the distant future.


Richter also fell in correction of an uptick on Monday.


OTP lost 0.17% to HUF 5,930 on turnover of HUF 5.20 bln from a HUF 9.14 bln session total, about a tenth short of the daily average this year.


MOL gained 1.33% to HUF 14,845 on turnover of HUF 2.26 bln.


Magyar Telekom rose 1.43% to HUF 426 on turnover of HUF 279 mln.


Richter retreated 0.25% to HUF 4,379 on turnover of HUF 1.33 bln.


The bourseʼs mid-cap BUMIX went out 0.42% lower at 1,601.53.

 


Elsewhere in the region, WIG 20 in Warsaw was down 0.03%, while Pragueʼs PX increased by 0.88%.


Western Europeʼs major indices were all up ahead of their close Tuesday, FTSE100 in London 0.15%, DAX30 in Frankfurt 2.22%, and CAC40 in Paris 2.03%.

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