CEE MARKETS-Currencies stable, stocks rise as stimulus hopes lift sentiment
By Anita Komuves
BUDAPEST, Aug 5 (Reuters) - Central European currencies held stable and stock indices gained on Wednesday as global markets looked forward to further stimulus measures in the United States and better-than-expected European earnings reports lifted investor sentiment.
Budapest's stock index .BUX gained 1% and Prague's equities .PX rose 0.53%. Warsaw's assets .WIG20 led gains in the region, rising 1.15% by 0845 GMT.
Poland's two biggest banks, PKO BP PKO.WA and Bank Pekao PEO.WA, both reported better-than-expected second-quarter results. Pekao's shares were up 2.7% and PKO BP gained 0.76% by 0851 GMT.
Regional currencies were stable. The Czech crown EURCZK= gained 0.16% and was trading at 26.130 versus the euro before the central bank's rate meeting on Thursday. The bank is likely to keep interest rates on hold, according to a Reuters poll.
A majority of analysts polled by Reuters also expect Romania's central bank to keep its benchmark interest rate on hold at 1.75% at its next meeting, in August.
Since the bank cancelled its meeting schedule in March, it hasn't said when it will meet.
The Romanian leu EURRON= was unchanged on Wednesday. The Hungarian forint EURHUF= held steady at 346.20 per euro. The Polish zloty EURPLN= eased 0.07%, to 4.399 versus the common currency.
Yields on the longest-dated Hungarian government bonds have come down substantially, by around 40 basis points, since the central bank last month resumed its quantitative-easing programme, which was begun in early May and suspended after a few weeks.
The Hungarian central bank bought $34.09 million worth of 15-year and 20-year government bonds from local banks on Tuesday. Yields edged higher at that auction, which one trader said was a normal correction after the falls since the July rate meeting.
"There was a significant drop in yields on the two longest-dated bonds (15-year and 20-year) after the announcement of the central bank," an FI trader in Budapest said.
"Yields on 10-year bonds are also down, but that was also affected by international trends, by 10-year yields dropping in the U.S. and Germany."
According to the Eikon page of the Hungarian Debt Management Agency HUBONDFIX, the yield on the 20-year bond was 2.79% and 2.64% on the 15-year bond, each more than 40 basis points lower than before the announcement of the National Bank of Hungary in July.
AT 1045 CET
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(Additional reporting by Alan Charlish in Warsaw and Luiza Ilie in Bucharest)
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