Hungary watchdog launches probe into OTP sell-off

BUDAPEST, Oct 10 (Reuters) - Hungary's financial markets watchdog PSZAF has launched an inquiry into a sell-off in OTP Bank's OTPB.BU shares on the Budapest bourse on Thursday, the regulator said on Friday.

OTP's shares fell over 14 percent in late trade on Thursday to end at 3,855 Hungarian forints ($20.96), its lowest level since May 2004 on market talk that the government planned to nationalise it.

OTP, central Europe's biggest independent bank, and the government both denied the rumour.

Market watchdog PSZAF said the sudden nature and extent of the price falls triggered its inquiry.

"Given the size, timing and the significant (price) difference of the deal in contrast to previous quotes, acting under its legal obligations, the Financial Services Authority has launched a market supervision procedure with immediate effect," PSZAF said.

"The market supervision procedure is aimed at revealing whether ... elements of market abuse and price manipulation materialised in relation with the noted share sale transactions," it said.

(Reporting by Gergely Szakacs; Editing by Erica Billingham)