OTP Bank Nyrt. (OTP), Hungary’s largest lender, dropped after Moody’s Investors Service downgraded six European countries and Hungary’s government said it may face more hurdles in its quest to obtain an international bailout.
The shares slid 2.7 percent to 3,930 forint by the close in Budapest. The benchmark BUX stock index, in which OTP has a 29 percent weighting, declined 0.8 percent. The MSCI Emerging Markets Index fell as much as 0.6 percent after Moody’s reduced the sovereign ratings of Spain, Italy, Portugal, Malta and Hungary’s neigbors Slovakia and Slovenia, increasing concern that the debt crisis is spreading.
Hungary, the European Union’s most indebted eastern member, may face more legal disputes with the European Commission as it works to resolve earlier conflicts that obstructed talks with the European Union and the International Monetary Fund on a bailout, Deputy Prime Minister Tibor Navracsics said today.
“A substantial move forward in the talks with the EU and IMF is needed for Hungarian shares to bounce back,” Akos Kuti, a Budapest-based analyst at Equilor Befektetesi Zrt., and colleagues wrote in a research report today.
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