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CEE MARKETS-Fed comments help Polish stocks to four-month high

Sandor Peto and Alicja Ptak

* Warsaw stocks hit 4-month high as Fed comments boosts mood Oil group PKN Orlen leads gain, reaching one-month high

* Bourse shrugs off EU scrutiny of state help to energy firms

* Government bond yields track continuing drop in core markets

BUDAPEST/WARSAW, Jan 11 (Reuters) - Warsaw's blue chip stock index jumped to a 4-month high on Friday as Federal Reserve Chair Jerome Powell's comments on patience in interest rate tightening helped some Polish shares break through technical resistance levels. The index rose by 0.8 percent by 1005 GMT, gaining twice as much as MSCI's developing world stocks index. Elsewhere in the European Union's eastern wing, Budapest and Prague shed 0.3 percent, with Hungarian stocks retreating from Wednesday's one-year high. Bucharest shares were flat. Powell's comments helped fuel a buying of stocks and bonds this week in global markets, boosting risk appetite. "Technical factors are important too (in Warsaw), (as) some companies have broken their technical levels," said Jaroslaw Janusz, stock broker at Noble Securities in Warsaw. "Energy companies are performing good today, as in the reality of today in Poland, those companies have the most room for the growth of revenue. The demand for oil in Poland is outgrowing refineries' capacities," he added. Oil group PKN Orlen's led the gains, rising by 2.5 percent to a one-month high. The index of Warsaw-listed banks gained 0.6 percent. It rose above its 90-day and 200-day moving averages this week. Polish shares gained this week even as the European Commission scrutinizes measures including Dec. 28 legislation to cut tax on electricity, to see if it complies with EU laws prohibiting illegal state aid to companies. The ruling PiS, which faces national elections later this year, has offered 4 billion zlotys ($1.07 billion) in compensation for utilities to prevent a sharp increase in power prices urged by the firms. The shares of state-owned utilities have risen since late December. Energa has gained 8 percent and Tauron has risen by almost 4 percent. The dovish Fed comments also helped the region's government bonds which tracked a continuing decline in U.S. yields. The yield on the 10-year Polish benchmark paper dropped by 4 basis points to 2.7985 percent. The corresponding Czech yield rose a tad to 1.82 percent. It has risen slowly this year in tandem with Czech FRAs, which still regained only part of the ground shed in December. They fell previously partly because some investors bet that the Czech central bank would move to a more neutral stance after an increase in its interest rates last year. Regional currencies were lukewarm, and mixed. The crown firmed and the zloty eased slightly. The forint was flat. Hungary's finance ministry said the state budget posted a huge surplus in December, but caused no surprise after recent reports about a late-year surge of EU fund inflows.



Latest Previous Daily Changebid close change in 2019Czech <EURCZK= 25.5840 25.5940 +0.04% +0.48%crown >Hungary <EURHUF= 321.3400 321.2500 -0.03% -0.08%forint >Polish <EURPLN= 4.2970 4.2920 -0.12% -0.17%zloty >Romanian <EURRON= 4.6780 4.6800 +0.04% -0.51%leu >Croatian <EURHRK= 7.4260 7.4265 +0.01% -0.22%kuna >Serbian <EURRSD= 118.3000 118.4500 +0.13% +0.00%dinar >Note: calculated from 1800 CET

daily change

Latest Previous Daily Changeclose change in 2019Prague 1012.30 1015.700 -0.33% +2.61%


Budapest 40673.22 40795.50 -0.30% +3.92%Warsaw 2354.76 2335.31 +0.83% +3.43%Bucharest 7394.77 7390.87 +0.05% +0.15%Ljubljana <.SBITOP 805.74 805.90 -0.02% +0.18%>Zagreb 1737.48 1740.16 -0.15% -0.65%Belgrade <.BELEX1 694.15 692.40 +0.25% -8.87%


Sofia 572.25 571.18 +0.19% -3.74%


Yield Yield Spread Daily(bid) change vs Bund change


Czech spread


2-year <CZ2YT=R 1.7100 0.0150 +228bps -1bps


5-year <CZ5YT=R 1.7510 -0.0040 +207bps +0bps


10-year <CZ10YT= 1.8600 0.0150 +167bps +3bps

RR> Poland

2-year <PL2YT=R 1.3840 -0.0420 +196bps -6bps


5-year <PL5YT=R 2.2340 -0.0690 +256bps -6bps


10-year <PL10YT= 2.8230 -0.0210 +264bps -1bps




3x6 6x9 9x12 3M

interban k

Czech Rep 2.12 2.16 2.18 2.01



Hungary 0.26 0.49 0.72 0.13Poland 1.74 1.74 1.74 1.72

Note: FRA are for ask prices quotes


************ ($1 = 3.7212 zlotys)

(Additional reporting by Jason Hovet in Prague; Editing by Andrew Cawthorne)