Hungarian Stocks Enter Correction, Bonds Fall on European Debt

[Joanne98]

Feb. 5 (Bloomberg) -- Hungary’s main stock index extended declines from this year’s peak to 12 percent and bonds sank the most in almost two months as concern deepened European governments may struggle to fund deficits.

The BUX index lost 2.8 percent to 20,224.74, surpassing the 10 percent threshold commonly defined as a so-called correction. The benchmark 8 percent bond due February 2015 slumped the most since Dec. 18, pushing the yield up 0.20 percentage point to 7.61 percent, Bloomberg data shows.

OTP Bank Nyrt., the country’s largest bank, sank 4.3 percent to 5,170 forint. Mol Nyrt., the biggest oil company, lost 4 percent to 16,900 forint.

Hungary, which received an international bailout in 2008, has “uncertain” fiscal prospects and a “very weak” economy, David Heslam, a director at Fitch Ratings, said yesterday. The country faces a “double-dip” recession and its deficit may be more than twice the target, Mihaly Varga, deputy chairman of the opposition Fidesz party, said in a Feb. 2 interview for Bloomberg News published yesterday.

“Hungary is more exposed to concerns about European debt” than other countries in the region “because of its own financial situation,” Gernot Jany, an Erste Group Bank AG analyst in Vienna, said by phone today. “This may have added to the global risk aversion as a sell-off trigger for Hungarian stocks.”

http://www.bloomberg.com/apps/news?pid=20601095&sid=aGJQQuGI5DQI

[westerebus]

1. That was fast.

:-)

[dixiegrrrrl]

2. So, is Europe unraveling?

[Joanne98]

3. We'll know next week.