According to analysts, the forint could recover this year after its weak performance in 2022.Continue reading
The Hungarian and US stock markets are in a rare stand-off, with August so far a particularly good month in Hungary, with the BUX climbing to all-time highs on Thursday, but overseas the overall performance has been particularly poor since the end of July: the leading S&P 500 index fell 4.8%, while the leading tech index (Nasdaq 100) fell 6.7%, writes Világgazdaság.
Meanwhile, the Hungarian stock index has gained 5.3 percent since July 31. The rise was led by OTP Bank shares, that incredibly were 10.1 percent higher on Friday than at the end of last month.
Commenting on Thursday’s record close, analysts at Erste Bank said: ‘The BUX rose to new highs both during the day (56,503 points) and at the close (56,470 points), while none of the leading stocks reached new highs. Only Richter is close to this level, meaning that it could be the leading stock, but
OTP’s good performance is the main reason for the new high, as well as the outperformance or at least above average turnover.
According to an analyst, the BUX is cheap and performing well, but a pause may be more likely now. After some sort of consolidation, perhaps on a one-year time horizon, for example if a number of issues are clarified – that could include EU funds, or even if the question of economic recovery is resolved – we could expect a more real major upward wave.
Overseas bonds are now offering appreciable real yields (in dollar terms), with annual inflation in the US at 3.2% in July, meaning that anyone buying 10-year government bonds now can ‘lock in’ a yield of 4.2% to 4.3% per annum for the next decade. That’s about the same as if the yield on a ten-year Hungarian bond were 18.6 percent for a year (compared with the current 7.55 percent.)
August’s woes on Wall Street continue, American business news channel and website, CNBC, summed up Friday’s developments, bemoaning in particular the four-day drop in tech stocks. The Nasdaq has not had such a bad week since December.
How did the week go, with the BUX closing the week up 0.2%? The S&P 500 almost fell by 2.1 percent in a week, the Nasdaq was down 2.6 percent, and the FTSE All-World index fell by the same amount.
The fall was partly led by the so-called Magnificent Seven, US technology stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. The group has lost more than $900 billion in value for three consecutive weeks, the worst run of aggregate market capitalization declines this year. In Europe, the region-wide Stoxx 600 index suffered a weekly decline of nearly two percent.
Via Világgazdaság, Featured image via Pexels
