Hungarian shares sank after industrial production in the country dropped the most in more than 16 years, deepening concern the economic slowdown will hurt profits.
OTP Bank Nyrt. (OTP), the country's biggest bank, declined the most in three weeks. Magyar Telekom Nyrt. retreated 5.8 percent after the former phone monopoly reported lower third-quarter revenue. Mol Nyrt., the largest oil company in Hungary, slid with crude oil prices.
The benchmark BUX Index (BUX) fell 9.6 percent, to 13,019.42, the lowest since Oct. 28. Elsewhere in the region, Warsaw's WIG20 Index lost 4.4 percent and the Czech PX Index sank 4.1 percent.
``The much weaker-than-expected industrial output signals that export demand is slowing much more than previously thought,'' John Milton, senior vice president at KBC Securities in Budapest wrote in an e-mail.
Production dropped 5.3 percent in September from a year earlier after declining 1.2 percent in August, the statistics office said today. Output fell for a fourth month for the first time since 1992 as the faltering euro region, which buys 57 percent of Hungarian exports, curbed demand for products assembled in the country such as Audi cars and Nokia phones.
OTP Bank retreated 360 forint, or 10 percent, to 3,080, the steepest drop since Oct. 16. Foldhitel es Jelzalogbank Nyrt., Hungary's second-biggest mortgage lender, lost 86 forint, or 9.8 percent, to 789.
A looming recession, the first since 1993, hurts the outlook for Hungary's banks, Moody's Investors Service said on Nov. 4. The economic decline will lead to falling lending and worsening credit portfolios, while banks will face higher funding costs, the credit ratings company said.
Magyar Telekom, controlled by Germany's Deutsche Telekom AG, slid 37 forint, or 5.8 percent, to 598. Third-quarter revenue dropped 4.6 percent 167.1 billion forint ($831 million) on falling fixed-line sales.
Mol tumbled 1,555 forint, or 12 percent, to 11,390, falling the most since Oct. 27. Crude slid for a second day on signs that demand for fuel will be eroded as the global economy slumps.
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