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CEE MARKETS-Zloty firms on stop-loss deals, Polish stocks retreat

* Zloty sails through 4.2 vs euro, boosted by stop-loss deals

* Recent robust economic figures continue to buoy zloty

* PKN Orlen sell-off drives .WIG20 stock index to 8-day low

* Hungarian bonds retreat, foreigners' holding drops

(Adds fall in Polish stocks, Czech government resignation) BUDAPEST/WARSAW, Nov 29 (Reuters) - The zloty set a 5-1/2 month high against the euro on Wednesday, boosted by stop-loss deals at the key 4.2 level, while Central European asset prices were mixed. The zloty, which along with the Czech crown, is the top performing currency in the world this year, has been appreciating for weeks. Poland's recent output figures have fuelled expectations that robust growth could tip the balance in the central bank and lead it to hike interest rates next year. In early trade, the zloty rallied to 4.186. BZ WBK chief dealer Mateusz Bieniek said fundamentals backed the zloty, while political risks were limited. "Moreover, over the last 20 years, December has usually been good for the zloty," he added. Warsaw's bluechip stock index led a decline of equities in the region, shedding 1.7 percent, mainly driven by a 4.4 percent plunge of volatile PKN Orlen. Some U.S. investors, digesting recent news on a decline in the oil group's refining margins, sold the shares.

The index of Warsaw-listed bank stocks retreated from a 2-1/2 year high and shed 1.3 percent. Economic growth is strong across the region, but inflation is not a concern everywhere. The Czech central bank has raised its interest rates twice since August to fight inflation. Expectations for further hikes keep the crown near 4-1/2 year highs against the euro. It firmed a shade to 25.485 on Wednesday. Most analysts expect further gains. The outgoing centre-left Czech government resigned on Wednesday, making way for billionaire Andrej Babis to form a minority government next month. In Romania, concerns over judiciary reform, corruption and tension between the government and the central bank remain in the limelight, on top of worry over rising inflation. The bank has requested a meeting with Prime Minister Mihai Tudose, just days after he criticised the bank for letting the leu weaken to record lows. The currency eased 0.1 percent. The forint eased 0.25 percent to 311.9. The latter is still off seven-month lows touched a week ago when the National Bank of Hungary announced new programmes to push long-term interest rates lower. The announcement boosted demand at a Hungarian bond auction last Thursday, also helping the forint. The latest government figures, however, showed that foreign investors did not take part in the rally and actually cut their Hungarian bond holding as yields were falling to record lows. Hungarian yields on bonds which expire in over five years rose 3-4 basis points on Wednesday. Ten-year papers were fixed at 2.11 percent, 27 basis points below U.S. Treasuries.

CEE MARKETS SNAPSH AT 1621 CET

OT CURRENCIES

Latest Previo Daily Change

us

bid close change in

2017

Czech crown 25.485 25.491 +0.02 5.97% 0 0 % Hungary 311.90 311.13 -0.25% -0.99% forint 00 50 Polish zloty 4.2039 4.2051 +0.03 4.76%

%

Romanian leu 4.6470 4.6408 -0.13% -2.41% Croatian 7.5450 7.5325 -0.17% 0.13%

kuna

Serbian 119.24 119.64 +0.34 3.45% dinar 00 50 % Note: daily calculated previo close 1800 change from us at CET

STOCKS

Latest Previo Daily Change

us

close change in

2017

Prague 1053.1 1053.8 -0.07% +14.2 4 5 7% Budapest 38903. 39242. -0.86% +21.5 92 18 6% Warsaw 2442.7 2485.7 -1.73% +25.4 8 1 0% Bucharest 7817.4 7802.6 +0.19 +10.3 5 2 % 4% Ljubljana 779.46 780.54 -0.14% +8.62

%

Zagreb 1860.5 1865.4 -0.27% -6.73% 2 7 Belgrade 736.30 739.42 -0.42% +2.64

%

Sofia 667.27 667.39 -0.02% +13.7

9% BONDS

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

Republic

2-year 0.224 -0.038 +091b -5bps

ps

5-year 0.935 0.07 +123b +3bps

ps

10-year 1.76 0 +137b -5bps

ps Poland

2-year 1.565 0.015 +225b +0bps

ps

5-year 2.632 0.099 +293b +5bps

ps

10-year 3.33 0.007 +294b -4bps

ps

FORWARD RATE AGREEMENT 3x6 6x9 9x12 3M

interb ank

Czech Rep <PR 1.03 1.21 1.35 0

IBOR=>

Hungary <BU 0.08 0.1 0.145 0.03

BOR=>

Poland <WI 1.774 1.83 1.928 1.73

BOR=>

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

(Additional reporting by Luiza Ilie in Bucharest; Editing by Elaine Hardcastle)