CEE MARKETS-Geopolitics hits stocks despite solid corporate earnings

* U.S.-North Korea tension curbs risk appetite

* Hungary's OTP retreats after surge on robust Q2 results

* Currencies near multi-week lows

* Czech central bank says crown strength key to policy course

BUDAPEST, Aug 11 (Reuters) - Central European stocks fell and currencies traded near multi-week lows as strong corporate results were outweighed by risk aversion due to rising tension between the United States and North Korea. Hungarian bank OTP, the region's biggest independent lender, reported a 12 percent annual rise in second-quarter earnings. Its shares pierced the 10,000-forint ($38.46) line, setting a 10-year high, before retreating to about 9,850 forints, down 0.8 percent, contributing to a half percent fall in Budapest's main stock index. Prague stocks fell 0.7 percent. Bucharest's main index was steady, helped by a jump in the earnings of gas producer Romgaz and gas pipeline operator Transgaz . Analysts said the robust results could lift OTP and the .BUX which is still near the record highs set earlier this week. "Despite the global 'cataclysm', we expect a mild rise in the BUX index," Erste analysts said in a note. OTP's Deputy CEO Laszlo Bencsik told a news conference that the rise of the shares above 10,000 forints "reflects the performance of the region, and that Hungary is on a robust growth track, on which we expect it to stay in the next years." Romanian data showed a retreat in annual industrial output growth to 11.1 percent in June from 15.3 percent in May, in line with earlier Hungarian and Czech figures. But the region's growth remains robust, and that is expected to buoy its currencies according to a Reuters poll last week.

The zloty traded off 5-month lows it set overnight. The leu briefly fell to a 5-week low, but quickly regained almost all the ground lost. Romanian inflation rose in July, also in line with other states in the region. "In all, this strengthens the case for the (Romanian) central bank to act (tighten policy) sooner rather than later, in our view," ING analysts said in a note. Last week the Czech central bank (CNB), which has overseen a rise in inflation and a boom in mortgage lending, became the first in the EU since 2012 to lift its ultra-low main interest rate. The crown was steady at 26.175 against the euro at 0742 GMT, still near Wednesday's 26.195, its weakest level since end-June. The CNB said in the minutes of last week's meeting that "the timing of further steps in raising interest rates would be conditional on the evolution of all key macroeconomic variables, including the exchange rate of the koruna". A firmer crown would help fight inflation, which has exceeded the bank's 2 percent target, running at 2.5 percent in July, but would reduce the scope for more rate hikes.



Latest Previo Daily Change


bid close change in


Czech crown 26.175 26.178 +0.01 3.18% 0 5 % Hungary 305.80 305.40 -0.13% 0.99% forint 00 50 Polish zloty 4.2790 4.2835 +0.11 2.92%


Romanian leu 4.5760 4.5741 -0.04% -0.90% Croatian 7.3970 7.3995 +0.03 2.14% kuna % Serbian 119.70 119.86 +0.13 3.05% dinar 00 00 % Note: daily calculated previo close 1800 change from us at CET


Latest Previo Daily Change


close change in


Prague 1018.7 1025.8 -0.70% +10.5 4 7 4% Budapest 36637. 36821. -0.50% +14.4 85 44 8% Warsaw 2372.1 2382.6 -0.44% +21.7 2 7 8% Bucharest 8333.5 8331.2 +0.03 +17.6 5 2 % 2% Ljubljana 807.25 808.68 -0.18% +12.4


Zagreb 1891.5 1886.3 +0.27 -5.18% 6 9 % Belgrade 0.00 723.12 +0.00 -100.0 % 0% Sofia 727.85 729.22 -0.19% +24.1


Yield Yield Spread Daily (bid) change vs change Bund in Czech spread


2-year 0.052 -0.052 +076b -3bps


5-year 0.104 0.02 +039b +4bps


10-year 0.888 0 +050b +2bps

ps Poland

2-year 1.85 0.021 +256b +4bps


5-year 2.745 0.049 +303b +7bps


10-year 3.426 0 +304b +2bps



interb ank

Czech Rep <PR 0.5 0.64 0.67 0


Hungary <BU 0.21 0.25 0.31 0.15


Poland <WI 1.765 1.8 1.849 1.73


Note: FRA are for ask quotes prices ********************************************************* *****

($1 = 260.0000 forints)

(Additional reporting by Radu Marinas in Bucharest/Jan Lopatka in Prague; Editing by Mark Trevelyan)