BUDAPEST: Hungary's stock market rose 1.2 percent on Monday, outperforming Central European peers, driven by a surge in shares of OTP and of Richter on its positive results from trials of a new drug.
By 0812 GMT, Richter jumped 1.6 percent to 5,475 forints, while shares of OTP Bank were 1.7 percent higher.
Oil and gas group MOL, which reported better than expected first-quarter results on Friday, was trading 0.9 percent higher at 16,380 forints. HSBC raised its target price for MOL to 18,200 forints from 18,000.
The Budapest stock exchange has firmed more than 10 percent so far this year, as healthy growth in Central Europe and Hungary's improving risk assessment has attracted an influx of funds into Hungarian bonds and stocks.
"We have expected the news (about Richter) but still, this is a positive for the stock," brokerage Equilor said in a note.
The Polish stock market index was down 0.2 percent, even though the zloty was 0.1 percent higher versus the euro in early trade in what an analyst described as a technical rebound.
"I think today's move might not be sustainable because there are still rating concerns," Raiffeisen Polbank analyst Dorota Strauch said. "There is a risk of zloty falling to new lows before Friday," she added.
Rating agency Moody's is due to review Poland's credit rating on Friday and there are fears that government spending plans and other political measures could prompt a downgrade.
In January, rating agency S&P downgraded Poland's credit rating, saying the ruling conservative government had weakened the independence of key institutions, particularly the constitutional court.
Last month, Moody's said Poland was facing heightened political risk as a result of its constitutional crisis, adding this may impair Poland's attractiveness for foreign investors.
"More volatility will appear in the coming days and in case Moody's lowers Poland's rating on Friday, the beginning of next week might see (Polish) bonds losing ground," Pekao analysts said in a note.
The Hungarian forint, which closed last week on a
weaker note due to disappointing March industrial output data, eased to around 314.50 versus the euro by 0825 GMT, reversing earlier modest gains.
Data showed on Monday that Czech industrial output was also weaker than expected in March, rising by 0.6 percent year-on-year against analyst forecasts for a 1.1 percent rise.
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