CEE MARKETS 3-Stocks trim gains; FX, bonds shrug off data, euro

                                
 * Forint, crown shrug off GDP data 
                                
 * Stocks trim gains after Ireland downgrade
                                
 
 (Updates with stocks move, Hungary tender)
                                
 By Dagmara Leszkowicz and Marius Zaharia
                                
 WARSAW/BUCHAREST, Dec 9 (Reuters) - Central European stocks
trimmed their gains on Thursday as an Irish rating downgrade
drained appetite for risky assets, but currencies and bonds held
steady in thin trade.
                                
 Fitch's downgrade on Ireland's sovereign debt reminded
regional investors that fiscally fragile states must remain in
austerity mode, keeping their growth prospects weak. Stocks
trimmed most of their morning gains after the announcement.
                                
 At 1424 GMT, Budapest's <.BUX> and Warsaw's <.WIG20> stock
indices were virtually flat from Wednesday's close, while
Prague's <.PX> traded 0.5 percent higher, but significantly off
intra-day peaks.
                                
 The Polish zloty <EURPLN=> and the Hungarian forint
<EURHUF=>, the currencies of the two countries in emerging
Europe expected to hike interest rates soon, edged up 0.1-0.2
percent as central bankers reiterated hawkish comments.
[ID:nLDE6B80CL] [ID:nBUD005639]
                                
 Romania's leu <EURRON=> was flat and the Czech crown
<EURCZK=> was a touch lower.
                                
 Regional assets shrugged off gross domestic product readings
in the Czech Republic and Hungary that were broadly in line with
initial forecasts, leaving intact the outlook for a slow and
vulnerable economic recovery. [ID:nLDE6B71CF] [ID:nLDE6B80D1]
                                
 Trade was thin as many investors have closed positions in
emerging Europe for the year, dealers said.
                                
 "There are a few foreigners in the market, but the corporate
side is almost inexistent, speculators are gone, people have
mostly exited positions. There's no point in taking risks at
this point," one trader in Bucharest said.
                                
 Bond markets were quiet as well. The Hungarian government
sold 40 billion forints worth of debt, as planned, at its first
auction of 12-month Treasury bills since last week's quarter
percentage point central bank rate increase.
                                
 The average yield rose to 6.10 percent from 6.05 at an
auction held two weeks ago. The long end of the curve has almost
flattened out since the surprise rate hike, with the spread of
10-year yields over 3-year bonds narrowing to 10 basis points
from about half a percentage point.
                                
 
                                
 12-MONTH GAINS
                                
 Developments in the euro zone, hit by a crisis of confidence
in its most indebted states, are seen as the main driver for
central European assets for the rest of the year, with few
domestic events expected in coming weeks.
                                
 The zloty has hit multi-month lows of almost 4.11 per euro
this month as Irish and Portuguese debt woes have dominated
sentiment and concerns over Hungary's unorthodox measures to
boost growth and cut the budget deficit weigh on the region.
                                
 Reuters polling, however, shows analysts expect the Polish
currency to appreciate over the course of the next year. Goldman
Sachs said in a note that it had revised its forecast, saying it
expected a rise to 3.82 in the next 12 months due to the
country's solid fundamentals, privatisation inflows and
prospective interest rate hikes.
                                
 "The current weakness reflects uncertainty over the
euro zone's fiscal woes; as these are addressed the zloty should
strengthen and return to a long-term appreciation trend," the
bank said.
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2010 
Czech crown      <EURCZK=>  25.061   25.033   -0.11%   +5.02%
Polish zloty     <EURPLN=>   4.031    4.038   +0.17%   +1.81%
Hungarian forint <EURHUF=> 277.48   277.73    +0.09%   -2.57%
Croatian kuna    <EURHRK=>   7.385    7.383   -0.03%   -1.03%
Romanian leu     <EURRON=>   4.297    4.297    0%      -1.39%
Serbian dinar    <EURRSD=> 106.98   107.3     +0.3%   -10.38%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    -1 basis points to  87bps over bmk*
7-yr T-bond   CZ7YT=RR   +1 basis points to  +81bps over bmk*
10-yr T-bond   CZ9YT=RR   +3 basis points to  +89bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond   PL2YT=RR    0 basis points to  +355bps over bmk*
5-yr T-bond   PL5YT=RR    -1 basis points to  +337bps over bmk*
10-yr T-bond PL10YT=RR   +4 basis points to  +298bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond   HU3YT=RR   +4 basis points to  +654bps over bmk*
5-yr T-bond   HU5YT=RR   +1 basis points to  +585bps over bmk*
10-yr T-bond   HU10YT=RR +4 basis points to  +491bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1524 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
and Marius Zaharia; Editing by Hugh Lawson)