Hungarian markets soar as Viktor Orbán exit sparks EU reset

Key topics:Forint and stocks surge after Viktor Orbán defeatPeter Magyar win boosts EU funding hopesMarkets rally on expected reforms and improved EU relations.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Andras Gergely, Peter Laca and Selcuk Gokoluk.Hungary’s forint surged to a four-year high and local stocks hit a record high after Prime Minister Viktor Orban lost Sunday’s election, with the opposition’s victory expected to help unlock billions of euros in European Union funding.The currency appreciated 2.4% to 365.69 per euro as of 9:06 a.m. in Budapest, the strongest level since early 2022. Hungary’s dollar bonds were the best performers across emerging markets while the BUX stock index jumped by as much as 3.3% in early trading..The outcome represents a “new beginning” for Hungarian assets, said Soeren Moerch, a money manager at Danske Bank AS. The results also vindicate bets by investors who have been positioning for an historic win by Peter Magyar’s Tisza party. “Orban has accepted defeat, and Magyar is saying all the right things,” Moerch said. “Obviously, the HUF will rally and spreads will tighten—good news for Hungarian assets. We have been buying for the last three months in expectation of something like this.”.Read more:. Orban’s opposition to Ukraine aid strains EU and NATO relations.The results are an overwhelming rebuke to Orban’s self-styled “illiberal democracy,” which has been backed by both US President Donald Trump and Russian leader Vladimir Putin. With almost 99% of the votes counted, Tisza was set to win a commanding two-thirds majority that will allow it to quickly pass legislation unopposed and dismantle the system Orban built over 16 years in power..A supermajority for Magyar means the market will have “another reason to extend the forint rally,” said Frantisek Taborsky, a strategist at ING Bank NV in London. The gains may come even amid a risk-off turn in market sentiment after weekend peace talks between the US and Iran failed, he said.Investor positioning in Hungary was difficult to read due to developments in the US-Iran conflict, but the forint’s return to pre-war levels last week suggested that the market was already pricing in a simple Tisza victory, Taborsky said.‘Significant Thaw’Magyar’s ascent to power is seen helping unblock access to EU financing, which has been partly frozen by Brussels due to rule-of-law breaches by Orban’s administration. Tisza has also vowed to take steps toward joining the euro area, which would reduce Hungary’s borrowing costs, currently among the highest in the EU with the yield on 10-year local-currency government bonds averaging about 7% over the past 12 months.“The forint should continue to appreciate, and the HUF curve should bull flatten, on the back of a pro‑EU Tisza landslide victory that gives it a constitutional majority,” Barclays Plc analysts Ercan Erguzel and Marek Raczko wrote. “Once global risk sentiment stabilizes, the outcome of the Hungarian elections should also support the euro and CEE currencies.”In the run-up to the elections, bets for an opposition victory as well as a fragile truce in the Iran war drove Budapest stocks to their biggest weekly gain since 2020. A JPMorgan Chase & Co. index showed the risk premium on Hungary’s dollar bonds narrowed 17 basis points to 119 last week. .“We can expect a significant thaw in relations between Budapest and Brussels,” said Michał Jóźwiak, a currency analyst at Ebury. That should lead to the release of about €17 billion ($20 billion) in EU funds as well as low-interest loans for defense spending, providing a “significant growth stimulus for the Hungarian economy,” he said. .Read more:.EU deepens relations with SA amid Trump’s rising criticism.Wagers on a seismic shift in Hungarian politics had already helped the forint surge 7% against the euro and 21% against the dollar last year — the most among major emerging-market peers behind the seldom-traded Russian ruble. Budapest’s BUX equities index closed just below a record high on Friday.There’s “more outperformance to come” in Hungarian stocks, Morgan Stanley economists and strategists including Georgi Deyanov wrote in a note to clients. “If the new government were to succeed in unlocking access to EU funds, this could materially improve market confidence.” .© 2026 Bloomberg L.P.

Hungarian markets soar as Viktor Orbán exit sparks EU reset

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