BUDAPEST: Central European stock markets rebounded on Monday from last week's sharp falls in volatile trading, with Hungarian drug maker Richter strongly underperforming on adverse news concerning one of its main products.
The region's stock exchanges jumped following a positive close on US markets on Friday, with Warsaw and Bucharest leading gains, rising by around 1.6 percent.
Currencies were also modestly firmer, with the Polish zloty up 0.3 percent and Hungary's forint gaining 0.1 percent.
At 1003 GMT, Richter shares were 0.1 percent higher at 5,990 forints while the Budapest bourse's main BUX index was trading 1.2 percent higher.
Richter shares already plummeted over 6 percent on Friday when the company said it expected a temporary loss in revenues from its uterine fibroid medicine Esmya due to restrictions imposed on the product by the European Medicines Agency (EMA).
On Monday Richter said it expected flat revenues this year from 2017, calculated without revenues from Esmya.
"Richter reported mixed 4Q earnings, current news on Esmya overshadow the favourable trends," analysts at brokerage Equilor said in a note.
"From a technical aspect, once the resistance at the level of 6,200 (forints) is broken, Richter could fall further based on the chart ... with the next possible stop at 5,800 and then at 5,500 forints."
"Today we expect a slight (positive) correction on the EURPLN rate... The correction will have a temporary character in our opinion. In the coming days we may expect a return to increases in the EURUSD rate (...) and as a result a further rise in the EURPLN rate (more weakening)," BZ WBK bank said in a note.
The Czech crown, which has been firming on the Czech central bank's rate hikes since last year, was 0.2 percent stronger.
A Reuters poll published last week showed the crown will continue strengthening and in 12 months will be at levels not seen since late 2012, propelled by expectations for tighter monetary supply.
The region's currencies performed relatively well last week, helped by Central Europe's strong growth prospects, withstanding the storm on global markets amid a large stock selloff.
Even the forint's losses have been moderate, despite the Hungarian central bank's ultra-dovish stance.
Hungary's inflation remains below the central bank's target, so continued loose monetary policy is warranted, the bank's chief economist Daniel Palotai told a conference on Monday.
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