CEE MARKETS 3-Forint drops on lack of reform detail, stocks fall

                                
 * Forint, bonds down, lose early gains
                                
 * OTP Bank shares fall on bank tax plan
                                
 * Other FX off highs
                                
 
  (Recasts after Hungary reform presser)
                                
 By Jason Hovet
                                
 PRAGUE, March 1 (Reuters) - Hungarian bonds and the forint
erased gains on Tuesday after Budapest unveiled a reform plan
that lacked much of the detail markets had counted on, while OTP
Bank hit a three-week low on plans to keep a bank tax in place.
                                
 Hungarian assets have rallied this year on bets that a plan
to save billions and set finances on a sustainable path would
prevent the country's debt rating from falling to junk status.
                                
 The forint and bonds had gained in the morning session ahead
of the midday press conference which investors had expected to
lay out details of the reform package. The lack of those
triggered some profit-taking, analysts said.
                                
 Officials said structural reforms will improve the budget
balance by 900 billion forints ($4.59 billion) by 2013-14 and
would cut the country's debt, confirming an earlier media
report.
                                
 But they said talks on a new drug financing scheme would
start in April and a review of disability pensions by July -- a
disappointment for investors who had wanted a clear timetable
and amounts for spending cuts in those areas.
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^    For highlights of comments by Deputy Prime Minister Tibor
Navracsics and Economy Minister Gyorgy Matolcsy on reforms
please click on [ID:nLDE7200TV]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>    Markets were unimpressed, with the forint wiping out a half
percent in gains and bidding 0.2 percent down on the day at 272
to the euro by 1154 GMT. Bond yields rose by up to 10 basis
points.
                                
 "So far it is nothing more than empty phrases," said Carolin
Hecht, currency analyst at Commerzbank. "What markets did expect
was how the government was going to go about implementing those
targets. There is still potential for EUR/HUF to go upward."
                                
 News portal hvg.hu reported late on Monday the package would
meet market expectations, but many of the details from sources
in the report were not confirmed. [ID:nLDE71R2LX]
                                
 
                                
 BANK STOCKS HIT BY TAX
                                
 Shares in OTP Bank <OTPB.BU>, by far Hungary's biggest
lender, fell 3 percent after the government announced that it
would keep the windfall bank tax in place longer than previously
planned.
                                
 Analysts and dealers have warned over the past month that
the reforms could disappoint investors, and the forint has
struggled to hold 3 percent gains seen since the beginning of
the year in volatile trade in that time.
                                
 Investors see the centre-right government's reform plans as
critical after Hungary shook markets last year by eschewing
International Monetary Fund advice in favour of a pro-growth
campaign of cash-grabbing measures. [ID:nLDE71O0HW]
                                
 The drop in Hungary on Tuesday weighed on other currencies
in the region, with the Polish zloty <EURPLN=> bidding flat on
the day. The Czech crown <EURCZK=> inched down 0.1 percent and
the Romanian leu <EURRON=> was down 0.2 percent.
                                
 Markets also digested a dip in manufacturing indexes in
Poland and the Czech Republic. [ID:nPRA005474] [ID:nLDE71R13N]
                                
 But central European currencies found support from a
stronger euro versus the dollar as markets positioned for dovish
comments from the U.S. Federal Reserve later in the day. The
region often tracks euro/dollar moves. [ID:nLDE7200A9]
                                
 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2011 
Czech crown      <EURCZK=>   24.352   24.319  -0.14%   +2.66%
Polish zloty     <EURPLN=>    3.963    3.962  -0.03%   -0.13%
Hungarian forint <EURHUF=>  272.00   271.4    -0.22%   +2.2%
Croatian kuna    <EURHRK=>    7.419    7.418  -0.01%   -0.53%
Romanian leu     <EURRON=>    4.208    4.201  -0.17%   +0.59%
Serbian dinar    <EURRSD=>  103.26   103.37   +0.11%   +2.58%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond   CZ2YT=RR    0 basis points to  25bps over bmk*
7-yr T-bond   CZ7YT=RR    -6 basis points to  +81bps over bmk*
10-yr T-bond   CZ9YT=RR    -2 basis points to  +85bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1256 CET.
Currency percent change calculated from the daily domestic 
close at 1700 GMT.
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 (Reporting by Reuters bureaus, writing by Jason Hovet; Editing
by Ruth Pitchford)