Rule of Law Mechanism: Hungarian Stock Market Plunges, Forint Weakens
As we reported earlier, the European Commission announced on Tuesday that it is launching the rule of law case against Hungary. When President Ursula von der Leyen made the announcement, the Hungarian stock market plunged, weakening the forint from its value of 370 against the euro to 377.
This article originally appeared on our sister site, Ungarn Heute. Translated by Julia Tar.
After the European authority continued to express its concerns about Hungary and Poland, particularly with regard to the independence of the judiciary and corruption, the financial market quickly reacted: the Hungarian stock market started to fall and the forint weakened.
The BUX stood at 44,849 points at 3:30 p.m. and fell to 43,727 points at 4:30 p.m. – it was down 4.11% on Tuesday afternoon.
The stock market was out of shape early on Tuesday, and fell further after the announcement. On the Hungarian stock exchange, investors mainly sold their OTP shares and the big bank lost 5.4% at 4:30 p.m.
The Budapest Stock Exchange’s stock index, the BUX, finally closed Tuesday with a minus of 3.55% or 1610.52 points at 43,787 points.
Not only did stock prices fall after the announcement of EU procedures, but the forint also weakened. After the announcement, it fell to nearly 377 against the euro – down 2.2% from yesterday’s close – and then corrected to 375. After the close, the dollar was trading at above 343 forints, the pound at 450 and the Swiss franc at 369.6. .
In conclusion, the forint weakened from 370 (Tuesday morning) to 377 (Tuesday evening) and was still at this level Wednesday morning.
Source: Portfolio
Featured image via Márton Mónus/MTI
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