Hungary Bonds Snap 7-Day Slump, Stocks Rise on U.S. Jobs, China

Hungarian bonds snapped a seven-day selloff and stocks rose for a second day as U.S. and Chinese economic data and speculation Europe may step up efforts to end its debt crisis boosted investor confidence.

Notes in forint due February 2015 jumped, pushing the yield down 9 basis points to 8.14 percent from a 14-month high as of 5:19 p.m. in Budapest. The BUX equity index rallied 3.2 percent, the most in three months, at the close after plunging 11 percent in November.

A U.S. report showed private jobs in the world’s biggest economy grew faster than expected last month, while China said November manufacturing growth was the fastest in seven months. The euro gained after European Central Bank President Jean-Claude Trichet signaled that leaders may step up their response to the fiscal crisis that has led to a surge in borrowing costs of Europe’s most indebted members.

“The domestic market” in Hungary “will move more in line with international markets from now on following the severe underperformance of previous days,” Akos Herczenik, a stock analyst at Raiffeisen Bank in Budapest, wrote in a report today.

Hungarian shares and bonds last month had their biggest monthly rout since February 2009 as a plan to funnel assets from private pension funds, a row between the central bank and the government, special corporate taxes on some industries and speculation the country may have its credit ratings downgraded drove investors from Hungarian assets.

Forint, Zloty

Hungary’s manufacturing index of purchasing managers in November showed an expansion for a fifth month, jumping to 54.9 from 51.5 in October, MLBKT Research said today.

The figure was “in contrast with the current doom and gloom environment and the newly announced taxes on several sectors of the economy,” Gabor Ambrus, an analyst at 4Cast Ltd. in London, wrote in an e-mail to clients.

The forint, the world’s worst-performing currency last month, was little changed at 280.68 per euro. The cost of insuring Hungary’s debt against non-payment with credit-default swaps fell 9 basis points to 368 basis points after rising to its highest since June yesterday, according to CMA data.

Elsewhere in central Europe, Poland’s zloty was 0.1 percent stronger at 4.0202 per euro. It earlier advanced as much as 0.6 percent after a report showed Poland’s manufacturing grew for a fourth month in November.

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