Hungary Stocks Pare Rally as Prime Minister Set for Re-ElectionMarton Eder
Hungarian stocks snapped the longest rally in more than a year on the last trading day before parliamentary elections that opinion polls show will be won by Prime Minister Viktor Orban.
The benchmark BUX index fell 1 percent to 17,990.04 by close in Budapest, ending a nine-day rally that lifted the gauge 8.4 percent. That’s the third-largest drop today among 93 primary indexes tracked by Bloomberg. The second and third biggest stocks, Gedeon Richter Nyrt. and Mol Nyrt., both declined at least 1.3 percent.
Hungarian stocks advanced after the central bank lowered interest rates for a 20th consecutive month on March 25, boosting expectations the country’s economic recovery will find more traction. Orban’s Fidesz party will retain its majority in parliament in the April 6 ballot, according to surveys by Ipsos, Median, Nezopont, Tarki and Szazadveg.
“The only questions seems to be whether Fidesz will retain its two-third majority in parliament or not,” Jozsef Miro, an equity analyst at Erste Group Bank AG’s Budapest-based brokerage, said by phone. Investors see now as a good opportunity to take profits from the recent rally, he said.
The forint gained 0.5 percent to 305.64 per euro by 5:12 p.m. in Budapest, the strongest level in more than two months. The yield on Hungary’s benchmark three-year government bonds fell five basis points to 4.5 percent, the lowest since Feb. 4 on a closing basis.
The elections may turn out to be a “typical non-event” and have a less than 1 percent effect on the forint, Imre Kerekgyarto, a currency-trader at Commerzbank AG in Budapest, said in an e-mailed note today. Markets seek “continuity and stability,” he said.