CEE MARKETS 2-Crown, zloty give up early gains, stocks dip

                                
 * Crown, zloty give up morning gains as stocks dip
                                
 * Poland not seeking IMF help, cbank chief says
                                
 * Other FX down but sentiment improved slightly
                                
  
 (Adds fixed income, background)
                                
 By Dagmara Leszkowicz
                                
 WARSAW, March 5 (Reuters) - The Czech crown and Polish zloty
gave up early gains on Thursday on the back of a drop in stocks,
but stayed at stronger levels as investors bet on the countries'
stronger fundamentals in the battered region.
                                
 At 1017 GMT, the Czech crown <EURCZK=> was 0.1 percent
stronger against the euro to bid at 27.35, while the Polish
zloty <EURPLN=> weakened 0.2 percent after an almost 0.5 percent
rise earlier. The moves followed 1-2 percent gains on Wednesday.
                                
 Prague and Warsaw stock indices slipped around 0.5 percent,
following western peers lower and markets braced for expected
interest rate cuts from euro zone and British central banks
later in the day. [ID:nL5682950]
                                
 Dealers said this week that investors had started taking
long positions in the zloty or crown against the Hungarian
forint due to better prospects of managing the global slowdown.
                                
 The forint <EURHUF=> was down 0.2 percent at 308.9 per euro
after falling to an all-time low of 312.25 on Wednesday.
Romania's leu <EURRON=> was steady.
                                
 "The forint is still a different story," said Ulrich
Leuchtmann, head of foreign exchange research at Commerzbank.
                                
 "The monetary policy and political stance (to the currency)
has been found on the market to not be appropriate."
                                
 Analysts have said falling interest rates to combat sinking
economies in central Europe has accelerated the fall of
currencies to multi-year or record lows this year. 
                                
 But Czech rate setters signalled last month that easing was
off the cards due to the weak crown, something other central
banks have avoided so far.
                                
 Policymakers have also been on a push to differentiate their
economies from weaker neighbours in central Europe, and analysts
said the push is starting to bear fruit -- and the cross plays
were a result.
                                
 The move also has helped Polish bonds, which tracked zloty
gains.
                                
 "Since yesterday we can see the foreign investors buying
papers from a short-end of the curve and it's because of an
improvement in how Poland is seen," said one Warsaw-based
dealer.
                                
 The Polish central bank governor, Slawomir Skrzypek, told
daily Fakt Poland that the country did not need IMF aid --
unlike Hungary which sought help last October -- due to its
stable fundamentals. [ID:nL5439669]
                                
 Romania has also started talks with the IMF on a possible
deal.
                                
 "So far we had a situation that a sharp weakening of one
currency in the region pushed its peers down. The last few days
was different -- the forint fell sharply while the Czech crown
was gaining," a Warsaw dealer said.
                                
 The Czech crown has gained 3.7 percent this week, lifted
also by speculation that French drugs maker Sanofi-Aventis
<SASY.PA> was buying crowns to pay for its 70 percent buyout of
shares in Czech generics drug maker Zentiva <ZNTVsp.PR>, which
it succeeded in last month.
                                
 
----------------------MARKET SNAPSHOT-------------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   27.352   27.37   +0.07%    -2.19%
Polish zloty     <EURPLN=>    4.696    4.686  -0.21%   -12.37%
Hungarian forint <EURHUF=>  308.9    308.37   -0.17%   -14.68%
Croatian kuna    <EURHRK=>    7.406    7.393  -0.18%    -0.55%
Romanian leu     <EURRON=>    4.277    4.281  +0.09%    -6.14%
Serbian dinar    <EURRSD=>   94.269   94.28   +0.01%    -5.08%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -21 basis points to  213bps over bmk*
4-yr T-bond   CZ4YT=RR    -27 basis points to  +234bps over bmk*
8-yr T-bond   CZ8YT=RR    -18 basis points to  +307bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    -6 basis points to  +449bps over bmk*
5-yr T-bond   PL5YT=RR    -2 basis points to  +378bps over bmk*
10-yr T-bond PL10YT=RR    -3 basis points to  +310bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1118 CET.
Currency percent change calculated from the daily domestic 
close at 1600 GMT.
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 (Reporting by Reuters bureaus; Writing by Dagmara Leszkowicz;
Editing by Victoria Main)