BUX rises for a fourth day

Telco

The Budapest Stock Exchangeʼs main BUX index finished up 1.12% at 21,610,82 Thursday after rising 1.03% Wednesday. It is up 29.92% from year-end, after losing 10.40% last year. The Budapest bourse rose for a fourth consecutive day, losing in volumes only, while this weeksʼ global rise became patchy on second thoughts concerning the economy and company profits ahead of the third-quarter results season.

Thursday rounded out a recent series of bad news from Germany, this time on sharp falls in manufacturing and foreign trade in August from July, and further deceleration of growth in annual comparison. This kept alive hopes for more quantitative easing from the ECB, but slowed down Western share markets from early this week.

Germany is the largest trading partner of Hungary. However, Audi said engine production in Hungary was not affected by the emission-rigging scandal at its parent, Volkswagen.

Hungary itself saw the return of deflation in September despite the record low base rate and a rack of other easing measures of the central bank. Data out on Thursday showed that still tepid rises of consumer durables prices and hardly accelerating core inflation, reflecting stubbornly lacklustre demand on chronically low average household income, could not counterbalance tumbling automotive fuel prices in the headline figure that came in much worse than expected.

The market apparently welcomed the figures that confirmed policy of the National Bank of Hungary (MNB) should be loose for an extended period of time, regardless of the prospect that there still was no sign it alone could stimulate consumer demand and, hence, corporate lending and investments, analysts add.

Hungary is set to maintain its main policy rate at its current record low 1.35% at least until the end of next year, Erste Bank said in a note on Thursday, in light of Septemberʼs inflation data. Even as headline inflation is set to return by the end of this year, Erste put this yearʼs average inflation rate at 0%, well below the 3% inflation target, and reckoned the first Hungarian interest rate increase might come as late as in the third quarter of 2017.

OTP won 1.86% to HUF 5,490 on turnover of HUF 3.38 bln from a preliminary HUF 6.68 bln session total, a quarter short of the daily average this year. (8,990)

MOL gained 1.31% to HUF 13,190 on turnover of HUF 1.84 bln.

Magyar Telekom ended flat at HUF 397 on turnover of HUF 164m.

Richter advanced 0.68% to HUF 4,571 on turnover of HUF 1.24 bln.

The bourseʼs mid-cap BUMIX went out 0.31% higher at 1,617.54.

Elsewhere in the region, WIG 20 in Warsaw was up 0.76%, while Pragueʼs PX shed 0.70%.

Western Europeʼs major indices were all up ahead of their close on Thursday, FTSE100 in London 0.41%, DAX30 in Frankfurt 0.12%, and CAC40 in Paris 0.05%.

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