×

CEE MARKETS-Stocks, currencies retreat in profit-taking after Macron win

* Macron win positive, but priced in; fx, stocks give up ground

* Crown touches 4-week high, Prague stocks rise

BUDAPEST, May 8 (Reuters) - Central European stocks eased and currencies retreated from multi-week highs on Monday on profit-taking after pro-EU centrist Emmanuel Macron won France's second-round presidential election on Sunday. The euro, which initially surged to a six-month high on Monday, also gave up its gains against the dollar and Western Europe's main equities indices, including Paris, dropped. Macron's victory over the far-right candidate Marine Le Pen underpins views that France remains committed to European Union and euro zone membership. The reaction of markets shows that the outcome had been mostly priced in, said Zoltan Varga, analyst of Equilor brokerage in Budapest. "This is the classic buy on the rumor, sell on the news," he said. Macron's victory may mean some political friction for some Central European states in the medium-term, he added. Macron said after his first-round victory that he would push for EU sanctions against Poland to defend the bloc's democratic values. He has also criticized Hungary. The overall impact is positive as it brings more stability into European politics "so this would be highly beneficial for CEE markets which largely depend on the EU political unity," Raiffeisen analyst Gintaras Shlizhyus said in a note. Macron will still face a tough national assembly elections campaign, Erste analysts said in a note. Central European currencies traded about 0.1 percent firmer against the euro at 0813 GMT. Initially, the Czech crown and the zloty strengthened by about 0.4 percent, with the crown touching a four-week high and the zloty testing 20-month highs. Regional stock indices mostly eased, by less than half a percent, or were flat. Warsaw's bluechip index shed 0.25 percent, dragged down mainly by a 3 percent fall of the shares of KGHM. The company, one of the world's biggest copper producers, reported a 147 percent surge in its first-quarter net profits, but copper prices continued to fall after Friday's rebound from five-month lows. Bucharest's main index shed about half a percent, driven down by a more than 4 percent fall in the shares of lender BRD. The stocks retreated from a six-year high hit on Friday after the bank reported a jump in first-quarter earnings. The Czech bourse bucked the trend and its index rose 0.4 percent, helped by an almost 2 percent rise in Vienna Insurance shares to a 16-month high. Investors in Czech markets have ignored a government crisis as the economy's fundamentals remain healthy and elections are due in October anyway.

CEE SNAPS AT 1013 MARKETS HOT CET

CURRENCIES Lates Previ Daily Change

t ous bid close chang in 2017

e

Czech 26.70 26.73 +0.1 1.15% crown 00 10 2% Hungary 311.7 311.7 +0.0 -0.92% forint 000 300 1% Polish 4.200 4.205 +0.1 4.84% zloty 7 4 1% Romanian 4.546 4.551 +0.1 -0.24% leu 0 5 2% Croatian 7.420 7.429 +0.1 1.82% kuna 0 5 3% Serbian 123.0 123.1 +0.0 0.24% dinar 500 200 6% Note: calculate previ close 1800 daily d from ous at CET

change STOCK S Lates Previ Daily Change

t ous

close chang in 2017 e

Prague 1005. 1001. +0.4 +9.15% 94 75 2% Budapest 32750 32864 -0.35 +2.33% .22 .04 % Warsaw 2376. 2382. -0.25 +21.99% 20 17 % Bucharest 8260. 8298. -0.46 +16.59% 25 65 % Ljubljana 777.2 777.1 +0.0 +8.32% 6 1 2% Zagreb 1906. 1904. +0.1 -4.42% 61 50 1% Belgrade <.BELEX15 715.6 715.3 +0.0 -0.24% > 7 4 5% Sofia 660.8 663.5 -0.41 +12.68% 1 4 %

BONDS Yield Yield Sprea Daily d

(bid) chang vs change e Bund in Czech spread

Republic

2-year <CZ2YT=RR -0.18 -0.00 +049 -1bps > 2 5 bps 5-year <CZ5YT=RR 0.024 0 +033 +1bps > bps 10-year <CZ10YT=R 0.818 -0.00 +042 +1bps R> 4 bps

Poland

2-year <PL2YT=RR 2.002 -0.02 +268 -2bps > 4 bps 5-year <PL5YT=RR 2.903 0.003 +321 +2bps > bps 10-year <PL10YT=R 3.466 0.001 +306 +1bps R> bps FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interban k

Czech Rep < 0.34 0.41 0.47 0

PRIBOR=>

Hungary < 0.24 0.335 0.435 0.16

BUBOR=>

Poland < 1.755 1.795 1.835 1.73

WIBOR=>

Note: FRA are for quotes ask

prices

****************************************************

**********

(Additional reporting Luiza Ilie in Bucharest; editing by Susan Thomas)