Mol Nyrt. (MOL), Hungary’s largest refiner, rose to a one-month high, leading the benchmark BUX index to the longest rally in almost nine years.
Mol’s shares advanced 2.2 percent to 18,295 forint by the end of trading in Budapest, the highest closing price since Nov. 30. The BUX, in which Mol has the highest weighting at 33 percent, added 0.6 percent, extending gains in the past 10 trading sessions to 6.6 percent. The last time the BUX rose for as many days was in March 2004, the year when Hungary joined the European Union.
Emerging-market stocks advanced at the start of 2013 after U.S. lawmakers passed a bill that averted spending cuts and tax gains that had threatened the world’s largest economy. While emerging-market stocks jumped 4.8 percent in December as the Federal Reserve carried out its monthly bond purchases to boost liquidity, the BUX fell 0.5 percent on concern tax increases and energy price cuts imposed by Hungarian Prime Minister Viktor Orban’s cabinet will sap corporate profits.
“The Hungarian equities market became quite neglected mainly because of economic policy uncertainty,” Gergely Gabler, a Budapest-based analyst at broker Equilor Befektetesi Zrt., said by telephone today. “Those risks have now started to get priced out a bit.”
The Hungarian government, which is forcing energy suppliers to reduce prices for households by 10 percent as of this month, is considering further cuts, according to Janos Fonagy, state secretary at the Development Ministry, Nepszabadsag reported Jan. 5.
The price reduction probably won’t directly influence most of Mol’s businesses, said Gabler, who also cited technical reasons for Mol’s rebound.
Mol’s rally in late December and today, with sideways movement in between, shows a bullish “flag” formation, Gabler said. A bull flag formation, so-called because the price movements resemble a flag on a pole, is a continuation pattern which occurs during an uptrend. The height of the pole may be added to the “breakout” level to determine how high a security may advance.
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