Prague's main stock index <.PX> fell 2.7 percent by 1339 GMT, a bigger fall than 1.4-1.6 percent in Western European bourses Frankfurt <.GDAX> and Paris <.CAC40>.
Financial and energy sector stocks, which have a big weight in the Prague index, led the decline.
Energy shares were also dented by a fall in crude prices which helped widen the losses of the region's most liquid currencies late on Friday.
The forint
"High probability of Brexit (Britain leaving the European Union) remains the biggest short-term risk," Pekao analysts said in a note.
"Brexit" would chop 0.4 percent off Hungary's economic growth rate, Finance Minister Mihaly Varga said.
Expectations that MSCI will add China to its indices in a review due on Tuesday is also weighing on equities in the region. Such a move could lead to many investment funds reducing their exposure to other emerging economies, market participants said.
Erste analysts said in a note that MSCI was likely to change its indices gradually, spreading the change over a year, which means "the selling pressure caused could be limited".
The U.S. Federal Reserve's two-day meeting which starts on Tuesday will be watched. Dovish remarks could help bond markets while hawkish ones could hit emerging market currencies, analysts said.
"However, we expect the Fed to do nothing now," one Budapest-based fixed-income trader said.
Poland's 10-year government bond yield rose 10 basis points to 3.2 percent, its highest levels since January.
Romania's corresponding bonds were bid at 3.59 percent, up 4 basis points. The country sold 293.5 billion lei ($73.12 billion) worth of bonds at an auction, less than the amount planned.
Serbia sold bonds worth 6.4 billion dinars ($59.8 million).
Serbian bonds are attractive, given expectations for a further cut in central bank interest rates, but the new government to be presented this week should carry out reforms, Raiffeisen analyst Stephan Imre said in a note before the sale.
Serbia and the International Monetary Fund mission agreed to revise their 2016 growth forecast for the country to 2.5 percent from 1.8 percent.
But the dinar
CEE SNAP AT 1539
MARKETS SHOT CET
CURRENCIES
Late Prev Dail Chan
st ious y ge
bid clos chan in
e ge 2016
Czech
crown => 380 230 6% 5%
Hungary
forint => 6000 0550 9% %
Polish
zloty => 52 80 5% 2%
Romanian
leu => 58 80 05% %
Croatian
kuna => 30 09 10% %
Serbian
dinar => 5000 1900 5% 4%
Note: calcula prev clos 1800
daily ted ious e at CET
change from
STOC
KS
Late Prev Dail Chan
st ious y ge
clos chan in
e ge 2016
Prague <.PX> 817. 840. -2.6 -14.
80 05 5% 49%
Budapest <.BUX> 2592 2651 -2.2 +8.
1.63 9.61 5% 37%
Warsaw <.WIG20 1772 1782 -0.5 -4.6
> .73 .02 2% 5%
Buchares <.BETI> 6411 6410 +0. -8.4
t .00 .34 01% 7%
Ljubljan <.SBITO 689. 693. -0.5 -0.9
a P> 53 19 3% 5%
Zagreb <.CRBEX 1688 1694 -0.4 -0.0
> .07 .96 1% 9%
Belgrade <.BELEX 625. 624. +0. -2.8
15> 65 31 21% 6%
Sofia <.SOFIX 448. 445. +0. -2.7
> 25 27 67% 4%
BOND
S
Yiel Yiel Spre Dail
d d ad y
(bid chan vs chan
) ge Bund ge
in
Czech spre
Republic ad
2-year
RR> 2 05 5bps s
5-year
RR> 9 14 3bps s
10-year
=RR> 3 05 6bps s
Poland
2-year
RR> 5 8bps ps
5-year
RR> 2 2 3bps ps
10-year
=RR> 8 3 8bps ps
FORWARD RATE AGREEMENT
3x6 6x9 9x12 3M
inte
rban
k
Czech
Rep >
R=>
Hungary
>
=>
Poland
>
=>
Note: are for
FRA ask
quotes prices
*****************************************
*********************
(Additional reporting by Jason Hovet in Prague; Editing by Hugh Lawson)
By Sandor Peto and Bartosz Lada
