PRAGUE, Aug 18 (Reuters) - Hungary's forint recovered losses
on Wednesday, grinding higher on continued rate hike
expectations before a central bank meeting next week, while
shares in Czech utility CEZ scaled an 8-1/2 year peak
as wholesale electricity prices rose.
The rise in CEZ shares, which climbed as much as 3% and hit
their highest since January 2013 at 673 crowns, buoyed Prague's
main stock index amid mixed trading in central Europe.
Warsaw blue-chip stocks fell 0.7% and Budapest
Higher wholesale power prices point to growing profits in
the coming years for CEZ, and even though carbon allowance
prices are also rising fast, the Czech energy giant has a lower
carbon intensity in its fleet of plants than many peers.
"This is a competitive advantage for CEZ," Komercni Banka
analyst Bohumil Trampota said.
On currency markets, the forint was again in the
lead, having steadily gained 3.4% since hitting a multi-month
low on July 26. It was up 0.3% on the day at 0843 GMT, at 350.6
to the euro and near a test of the psychological 350 level.
Elsewhere, the Czech crown dipped 0.1% and the
Romanian leu was flat.
The zloty gained 0.2% to 4.554 to the euro and
Polish yields dropped on shorter-dated debt ahead of a central
bank tender to purchase bonds.
"We expect the lower volume of purchases to be sustained,
given the central banks commitment to end the QE program ahead
of the first interest rate hike," Erste Group Bank said.
"Given an upward surprise in July inflation, the chance of
seeing the first rate hike already in November has increased."
The Polish central bank has so far not rushed to follow the
Czech and Hungarian banks, which began raising interest rates in
June amid an inflation spike and building economic recovery.
The number of analysts saying a Polish rate hike may be possible
this year are growing as the economic recovery improves.
(Reporting by Jason Hovet in Prague; Editing by Emelia