BUX up closely tracking Western European peers

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The Budapest Stock Exchangeʼs main BUX index finished up 2.02% at 22,857.57 Tuesday after gaining 0.05% on Monday.

The BUX steadily strengthened throughout the day and turnover was high, around 30% more than the daily average this year. Investor sentiment on foreign markets was good, which supported buying on the Hungarian stock market and domestic news also boosted interest in stocks, especially OTP.

OTP on Tuesday broke through a technical resistance point of HUF 5,800, helped by news that Hungaryʼs Constitutional Court invalidated parts of a law instructing members of the Investor Protection Fund (Beva) to pay into a special fund established to compensate investors of failed brokerage Quaestor over an existing insurance threshold.

The decision by the Constitution Court provides relief for financial institutions, lowering their expenses. OTP earlier estimated it would have to compensate Quaestor investors HUF 57 bln.

The National Bank of Hungaryʼs Monetary Council decided to keep the central bankʼs key rate on hold at 1.35% at a policy meeting on Tuesday, reaffirming expectations by analysts.

The average yield of discount three-month T-bills at the weekly auction of the Government Debt Management Agency (AKK) fell to 0.80%, down 2 bps from the yield at the previous auction. Demand was strong, primary dealers bid for HUF 64.9 bln of the securities, another sign of investor confidence.

OTP gained 4.80% to HUF 5,879 on turnover of HUF 9.42 bln from a HUF 14.35 bln session total.

MOL was up 0.90% at HUF 13,430 on turnover of HUF 962 mln.

Magyar Telekom rose by 0.99% to HUF 410 on turnover of HUF 733 mln.

Richterʼs share price climbed 0.60% to HUF 5,030 on turnover of HUF 3.15 bln.

The bourseʼs mid-cap BUMIX finished 0.04% higher at 1,622.72.

Elsewhere in the region, the WIG-20 in Warsaw was up 1.84%, while Pragueʼs PX fell 0.24%.

Western Europeʼs major indices were up ahead of the end of trading. The FTSE100 in London gained 2.10%, the DAX30 in Frankfurt was up by 2.43%, and the CAC40 in Paris was up 2.83%.

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