December 4, 2017 / 11:56 AM / 12 days ago

CEE MARKETS-Stocks buck German rally, Richter plunge pulls down Budapest

    * Richter falls as EMA starts review of its Esmya drug
    * PKO BP retreat pulls down Warsaw stock index
    * Zloty firms, Polish rate-setters may voice worry over CPI

    By Sandor Peto and Marcin Goettig
    BUDAPEST/WARSAW, Dec 4 (Reuters) - Central European stocks
eased on Monday, dragged down by a sell-off in Hungary driven by
drugmaker Richter, now under investigation over an
anti-tumour drug, and missing a rally in western Europe.
    Germany's dollar-exposed equities index and other
indices in the Western wing of the European Union rose after the
U.S. Senate passed a tax package that is expected to buoy
equities markets globally.
    Budapest led equities losses in Central Europe, with its
main index shedding 0.6 percent by 1011 GMT, pushed down by an
almost 5 percent fall in Richter's stocks.
    Richter shares touched 8-and-1/2-month lows after the
European Medicines Agency (EMA) began a review of the company's
Esmya medicine used to treat non-cancerous tumours of the womb.
    "This follows four reports of serious liver injury, three of
which ended in liver transplantation, in patients treated with
the medicine," EMA said on its website.
    Warsaw's bluechip index eased 0.4 percent as shares
of PKO BP, Poland's biggest lender, continued to
retreat from almost-four-year highs reached last week.
    The forint and the zloty, meanwhile,
firmed 0.2 percent against the euro, indicating that they were
not hurt by outflows into the dollar, which in recent months
often weakened them in periods when the greenback strengthened.
    The region's currencies are buoyed by figures showing robust
economic growth, except for the leu which trades near
record lows due to worries that Romania's economy is
overheating.
    Poland's annual inflation jumped to a 5-year high of 2.5
percent in November according to flash figures released last
week.
    Analysts still expect the Polish central bank to keep
interest rates on hold at its meeting on Tuesday.
    But the bank's statement after the meeting will be closely
watched as some rate setters may become increasingly worried
that inflation may rise above 3.5 percent, the upper limit of
the bank's target range.
     "The rates market seems to be pricing in some comment
indicating an improvement in the economy and the resulting
pressure on monetary tightening," Citi Handlowy analysts said in
a note.
    "If such a comment were to be presented then the zloty has a
chance to strengthen further in relation to core currencies."
    Romania's 10-year government bond auction is expected to
attract "solid demand" even though the passage of the U.S. tax
cuts is bond-negative, ING analysts said in a note.
    
               CEE MARKETS  SNAPSH   AT  1111 CET         
                            OT                      
                            CURRENCIES                    
                            Latest  Previo  Daily   Change
                                    us              
                            bid     close   change  in
                                                    2017
 Czech crown                25.588  25.585  -0.01%   5.55%
                                 0       5          
 Hungary                    313.25  313.94   +0.22  -1.41%
 forint                         00      00       %  
 Polish zloty               4.2056  4.2150   +0.22   4.72%
                                                 %  
 Romanian leu               4.6330  4.6308  -0.05%  -2.12%
 Croatian                   7.5530  7.5547   +0.02   0.03%
 kuna                                            %  
 Serbian                    119.32  119.17  -0.13%   3.38%
 dinar                          00      00          
 Note: daily   calculated   previo  close   1800          
 change        from         us      at      CET     
                            STOCKS                        
                            Latest  Previo  Daily   Change
                                    us              
                                    close   change  in
                                                    2017
 Prague                     1066.2  1063.9   +0.21   +15.6
                                 4       8       %      9%
 Budapest                   37972.  38188.  -0.57%   +18.6
                                58      81              5%
 Warsaw                     2380.3  2389.9  -0.40%   +22.2
                                 4       2              0%
 Bucharest                  7796.3  7796.2  -0.02%   +10.0
                                 2       1              4%
 Ljubljana                  786.64  784.90   +0.22   +9.62
                                                 %       %
 Zagreb                     1862.4  1861.5   +0.05  -6.64%
                                 8       7       %  
 Belgrade                   744.34  744.59  -0.03%   +3.76
                                                         %
 Sofia                      670.16  667.02   +0.47   +14.2
                                                 %      8%
                            BONDS                         
                            Yield   Yield   Spread  Daily
                            (bid)   change  vs      change
                                            Bund    in
 Czech                                              spread
 Republic                                           
   2-year                    0.039   0.034   +075b   +3bps
                                                ps  
   5-year                    0.764   0.025   +110b   +1bps
                                                ps  
   10-year                   1.448  -0.098   +112b  -13bps
                                                ps  
 Poland                                                   
   2-year                    1.682   0.012   +239b   +1bps
                                                ps  
   5-year                    2.713   0.012   +305b   -1bps
                                                ps  
   10-year                   3.329   -0.01   +300b   -4bps
                                                ps  
               FORWARD      RATE    AGREEMENT             
                            3x6     6x9     9x12    3M
                                                    interb
                                                    ank
 Czech Rep             <PR    0.99    1.18     1.3       0
               IBOR=>                               
 Hungary               <BU    0.08   0.105    0.15    0.03
               BOR=>                                
 Poland                <WI   1.775   1.839   1.938    1.73
               BOR=>                                
 Note: FRA     are for ask                                
 quotes        prices                               
 *********************************************************
 *****
 
 (Additional reporting by Radu Marinas in Bucharest; editing by
Mark Heinrich)
  
 
 

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