BUDAPEST: Central European stocks rebounded on Friday as markets recovered in China, with Hungary's Richter jumping 2.7 percent on optimism over the company's new schizophrenia drug. Budapest stocks led gains in the region, rising by 1.5 percent.
Poland's blue-chip index, which fell to its lowest in almost seven years on Thursday, plunged another 1.7 percent by 1148 GMT.
Richter's new drug, cariprazine, has boosted its shares despite the firm's significant exposure to the risky Russian market.
"It seems investors have started pricing Richter to global pharma stocks due to the cariprazine story, which is within reach this year," said Attila Vago, an analyst at the brokerage Concorde. "This repricing is under way and has not finished yet."
Polish stocks have been under pressure from the new government's policies, which include a planned asset tax on banks and insurers and efforts to extend it control over the constitution court and state-owned media. Those have raised the possibility of European Union action against Poland..
"We've got a good macro backdrop, with fiscal loosening and a more dovish central bank allowing a positive upside growth surprise, unless bank credit dries up because of this bank tax," said Charlie Robertson, global chief economist of Renaissance Capital. "But what investors should worry about are the unexpected policy pronouncements."
China's major stock indexes jumped on Friday after the country's regulators ditched a circuit breaker mechanism that had halted trading twice this week and had been blamed for exacerbating the market sell-offs it was designed to limit. The move also helped boost European stocks and calmed nerves on global markets.
Hungary's forint, which early in the morning got some support from better-than-expected November industrial output data and a sizeable trade surplus, slipped half a percent by 1148 GMT. The zloty also eased 0.4 percent versus the euro.
"Weekend is here and some people are closing positions," a Budapest dealer said.
The leu was flat after the Romanian central bank kept its benchmark interest rate unchanged at 1.75 percent for the fifth straight meeting on Thursday.
"With sentiment turning for the better in global markets overnight (and with Chinese stocks rallying), the Romanian currency should start reversing some of the losses suffered in recent weeks," ING Romania said in a daily note.
The Czech crown was just off the strong end of its recent range and dealers have said pressure on the crown cap has been mild. Data released on Thursday showed the central bank bought 369 million euros in November to keep the crown weak, much less than in previous months.
Comments
Comments are closed for this article.