March 12, 2020 / 9:00 AM / a month ago

CEE MARKETS-Stocks plummet; Budapest down 9% as coronavirus turmoil escalates

    By Krisztina Than
    BUDAPEST, March 12 (Reuters) - Central European stock
markets plunged to multi-year lows on Thursday, led by Budapest
with a 9% decline, after U.S. President Donald Trump imposed
strict travel limits in a bid to halt the spread of the 
    Warsaw's blue-chip index slumped 7.6% to its lowest since
mid-2009. The Prague index fell more than 5% to its lowest
since July 2016. 
    Budapest was at its lowest since May 2017 as investors
digested the unexpected U.S. measure and looked to the European
Central Bank, which holds a meeting on Thursday and is expected
to announce stimulus measures. 
    The stocks of Central Europe's largest independent bank, OTP
Bank, plummeted over 13%.
    "The volatility of zloty and forint exchange rates shot up
and stock markets in Poland and Hungary were battered amid fresh
fears of virus spread, which led to both countries declaring
states of emergency and suspending key economic activities,"
Commerzbank said in a note.
    The Czech Republic is also introducing controls on its
borders with Germany and Austria and banning crossings away from
official frontier border posts to help fight the spread of the
coronavirus, Interior Minister Jan Hamacek said on Wednesday.

    The ECB is all but certain to introduce new stimulus
measures on Thursday, pushing policy closer to its limits to
help the euro zone economy cope with the shock of the
coronavirus pandemic. nL8N2B51Y9
   "The only question is, how far-reaching the package of
measures will be," Commerzbank analysts said "Will the ECB get
the bazooka out again and surprise the market with far-reaching
measures or will it disappoint the market?" 
    Hungary on Wednesday banned inbound travel from Italy, South
Korea, Iran and China for non-Hungarians in response to the
coronavirus outbreak.
    Analysts were increasingly drawing parallels with the 2008
economic crisis and assessing the expected economic fallout
    The region's currencies all weakened, with the Czech crown
 losing almost one percent, as markets weigh whether
the central bank will reverse its recent interest rate
tightening as the economy comes under strain.
    Romanian lawmakers meet late on Thursday to decide whether
to give their vote of confidence to designated Prime Minister
Florin Citu's government. 
    Citu's minority Liberal Party has been trying to trigger
early elections. His cabinet was initially expected to fail the
vote, but chances for a positive vote are increasing after the
spread of coronavirus cases.
                   CEE      SNAPSHO   AT                      
                   MARKETS  T        0912              
                            Latest   Previou  Daily    Change
                            bid      close    change   in 2020
 EURCZK  Czech     <EURCZK  25.9900  25.7600   -0.88%   -2.15%
 =       crown     =>                                  
 EURHUF  Hungary   <EURHUF  337.350  336.250   -0.33%   -1.84%
 =       forint    =>             0        0           
 EURPLN  Polish    <EURPLN   4.3340   4.3162   -0.41%   -1.79%
 =       zloty     =>                                  
 EURRON  Romanian  <EURRON   4.8195   4.8189   -0.01%   -0.65%
 =       leu       =>                                  
 EURHRK  Croatian  <EURHRK   7.5740   7.5755   +0.02%   -1.70%
 =       kuna      =>                                  
 EURRSD  Serbian   <EURRSD  117.630  117.630   +0.00%   -0.05%
 =       dinar     =>             0        0           
         Note:     calculated from            1800            
         daily                                CET      
                            Latest   Previou  Daily    Change
                                     close    change   in 2020
 .PX     Prague              840.48  885.100   -5.04%  -24.66%
 .BUX    Budapest           33288.3  36536.2   -8.89%  -27.76%
                                  7        4           
 .WIG20  Warsaw    <.WIG20  1403.10  1505.64   -6.81%  -34.74%
 .BETI   Buchares           7880.06  8381.47   -5.98%  -21.02%
 .SBITO  Ljubljan  <.SBITO   827.84   827.84   +0.00%  -10.59%
 P       a         P>                                  
 .CRBEX  Zagreb    <.CRBEX  1591.42  1591.42   +0.00%  -21.12%
 .BELEX  Belgrade  <.BELEX   752.28   752.28   +0.00%   -6.16%
 15                15>                                 
 .SOFIX  Sofia     <.SOFIX   495.12   495.12   +0.00%  -12.85%
                            Yield    Yield    Spread   Daily
                            (bid)    change   vs Bund  change
         Czech                                         spread
 CZ2YT=    2-year  <CZ2YT=   1.8320   0.0000   +281bp    +2bps
 RR                RR>                              s  
 CZ5YT=    5-year  <CZ5YT=   1.1390   0.0010   +207bp    +1bps
 RR                RR>                              s  
 CZ10YT            <CZ10YT   1.1310   0.0000   +190bp    +2bps
 =RR     10-year   =RR>                             s  
 PL2YT=    2-year  <PL2YT=   1.2290  -0.0040   +221bp    +2bps
 RR                RR>                              s  
 PL5YT=    5-year  <PL5YT=   1.4910   0.0000   +242bp    +1bps
 RR                RR>                              s  
 PL10YT            <PL10YT   1.7150   0.0020   +249bp    +2bps
 =RR     10-year   =RR>                             s  
                            3x6      6x9      9x12     3M
         Czech     <CZKFRA     1.82     1.38     1.05     2.34
         Rep       ><PRIBO                             
         Hungary   <HUFFRA     0.58     0.57     0.60     0.67
         Poland    <PLNFRA     1.39     1.11     0.96     1.69
         Note:     are for ask                                
         FRA       prices                              


 (Additional reporting by Jason Hovet and Alan Charlish, editing
by Larry King
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