BUDAPEST, April 19 (Reuters) - Central European stocks fell
on Monday while currencies eased a shade further as Greece's
debt crisis and U.S. fraud charges against Goldman Sachs kept
investors on edge and diminished risk appetites.
Dealers said worsened global sentiment would likely weigh on
the region for the rest of the day, though further losses should
be limited.
By 0746 GMT, Hungary's forint <EURHUF=>, the Czech crown
<EURCZK=> and the Polish zloty <EURPLN=> were all about 0.1
percent lower versus the euro.
Stocks in Budapest were down 2 percent, while the Warsaw
bourse lost 1.8 percent and Czech stocks were 0.9 percent lower.
"It's Greece, Goldman, stocks and volcanic ash altogether
that worsening sentiment," said one Warsaw-based dealer.
He said a threat of currency intervention, though lower now,
was still weighing on the zloty.
"CEE currencies have taken a hit this morning ... We are
likely to see some profit-taking in the coming sessions should
negative news continue to build," UniCredit said in a note.
The forint, which rose close to 16-month highs last week, is
still seen supported by market optimism that a strong government
after a second round of elections on April 25 would carry out
the reforms needed to set the economy on path towards growth.
The centre-right Fidesz party has a strong chance of winning
two-thirds of the seats in Hungary's next parliament.
"I don't think we will see a dramatic weakening today, I
expect the forint to ease to a maximum of 266 (against the
euro)," a currency dealer in Budapest said.
"The strong political support (behind Fidesz) is keeping the
forint strong, which will probably last until they come out with
their budget plans."
Fidesz has campaigned on tax cuts and measures to boost the
economy which some analysts said could be difficult to reconcile
with a need to keep fiscal policy tight in Hungary.
The Czech crown <EURCZK=> retreated further from late Friday
and was nearly 1 percent off its 7-month high hit last week,
when it tested the 25 per euro resistance level.
Analysts said with evidence of better foreign demand in the
economy, the crown could again test fresh highs.
"In light of Friday's correction not being so significant, a
chance still exists to test the 25 level," Komercni Banka
analysts said in an early note, adding 24.95 would be the next
important technical level.
The Czech crown dipped last Thursday after central bank
Governor Zdenek Tuma said he was leaving his post early to
pre-empt a lengthy period of speculation about his successor.
[] Two central bank vice-governors were seen as the
top candidates to replace him.
The Romanian leu <EURRON=> also weakened early in the
session on Monday, hitting a two-month low against the euro.
"Bourses have fallen and risk is off the table," said one
dealer with a foreign bank in Bucharest.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 25.166 25.144 -0.09% +4.58%
Polish zloty <EURPLN=> 3.889 3.886 -0.08% +5.53%
Hungarian forint <EURHUF=> 264.68 264.48 -0.08% +2.14%
Croatian kuna <EURHRK=> 7.255 7.258 +0.04% +0.75%
Romanian leu <EURRON=> 4.152 4.15 -0.05% +2.06%
Serbian dinar <EURRSD=> 99.107 99.02 -0.09% -3.26%
All data taken from Reuters at 0945 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Krisztina Than; editing by John Stonestreet)
