(Adds details)
PRAGUE, Oct 10 (Reuters) - The Hungarian forint hit a two
year low on Friday and the Polish zloty led central European
currency losses, as a fresh wave of risk aversion spurred
selling in emerging markets.
The forint <EURHUF=> fell 2 percent to 264.1 against the
euro, while the Polish zloty <EURPLN=> was down 2.4 percent to
3.57 per euro by 0804 GMT, having cut losses from almost 4
percent lower earlier.
Stocks in the region sold off with Prague's index more than
13 percent to near a four-year low and Polish banks falling as
much as 8 percent in early trade.
In Hungary, the bourse lost more than 12 percent, with
shares in its biggest listed companies MOL <MOLB.BU>, OTP
<OTPB.BU>, Egis <EGIS.BU> and Magyar Telekom <MTEL.BU> hammered
lower by close to 15 percent .
The regional sell-off followed a steep drop in Hungary's
forint late on Thursday as concerns grew over the country's
financing and banking system amid the global financial crisis
and as the government said it would redraft the 2009 budget.
But market watchers chalked the falls up to a reaction to
steep slides in developed global markets.
"Basically it is the global backdrop. Global equities have
recorded heavy losses in the last 12 hours," said Martin Blum,
head of emerging markets economics and forex strategy at
UniCredit in Vienna.
"It's the combination of extreme global stress with
increased market focus on local vulnerabilities in that
environment."
Central Europe's banking system has stayed mostly insulated
from the financial crisis that has intensified in Europe and
forced Iceland to take control of its largest lenders.
On Friday, Austria's Erste Bank <ERST.VI>, a major investor
in the region, said it had 300 million euros in exposure to
Icelandic banks. Trading on the Vienna stock exchange was halted
in the morning.
In eastern Europe investors have mainly flashed red flags
around Hungary and Romania, which are more exposed to foreign
credit.
"This is a new wave of risk aversion. The Dow closed down
over 7 percent, Nikkei is down 9 percent. This hit all global
stocks and emerging market currencies are getting hammered," a
Budapest-based currency dealer said.
Romania's leu <EURRON=> fell more than 2 percent, before
cutting losses to 3.82 per euro to trade 0.4 percent lower, and
dealers cited an indirect central bank intervention.
The Czech crown <EURCZK=> hit a four-month low after
breaking above the key 24.95 per level before recovering to
24.79 per euro, down 0.1 percent from Thursday's domestic close.
Slovakia's crown <EURSKK=>, stable since July because it is
set to vanish in January when the country swaps it for euros,
was at 19-week lows, trading 0.8 percent down at 30.65 per euro,
from 30.4 on Thursday morning.
The crown's conversion rate for euro adoption was set at
30.126 per euro.
----------------------MARKET SNAPSHOT-------------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2008
Czech crown <EURCZK=> 24.787 24.767 -0.08% +6.45%
Polish zloty <EURPLN=> 3.565 3.482 -2.38% +0.99%
Hungarian forint <EURHUF=> 264.050 258.750 -2.05% -4.43%
Croatian kuna <EURHRK=> 7.138 7.130 -0.11% +2.57%
Romanian leu <EURRON=> 3.820 3.806 -0.37% -6.70%
Serbian dinar <EURRSD=> 79.990 79.618 -0.47% -1.56%
All data taken from Reuters at 1004 CET.
Currency percent change calculated from the daily domestic
close at 1500 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet)
