PRAGUE, June 29 (Reuters) - Central European stock markets
eased on Tuesday, dragged down by global nerves that coronavirus
outbreaks in Asia would hurt economic recoveries, while Poland"s
zloty pulled back before a key inflation reading this week.
The zloty was the biggest mover in the region as
central European currencies paused after recent gains amid
investor bets on rising interest rates.
Markets will gauge a Polish flash inflation reading for June
due on Wednesday to see if Poland"s central bank could take a
more hawkish tone following interest rate hikes in Hungary and
the Czech Republic this month.
"In the coming days we can see a continuation ... towards
the June (highs for the zloty), especially if Wednesday"s CPI
reading revives speculation about tightening of monetary
policy," Konrad Bialas, chief economist at DM TMS Brokers, said.
For now, the zloty was stuck on the weak side of 4.50 to the
euro - trading at 4.516 at 0949 GMT - and a dealer said that
psychological level would provide resistance to further gains
for now.
Elsewhere, Hungary"s forint eased less than 0.1%
and the Czech crown gained less than 0.1% in sideways
trading.
Central banks in both countries last week became the first
in the European Union to return to interest rate hikes to tackle
inflation rising at the fastest pace in the bloc. The moves come
just over a year after the coronavirus pandemic forced rate
setters into emergency cuts to cushion their economies.
Poland"s inflation hit a rate of 4.6% in May, the second
highest in the EU after Hungary, according to Eurostat. However,
Poland"s central bank has stuck to a dovish tone.
On stock markets, Warsaw blue chips led losses,
falling 0.9%. Budapest and Prague also dropped,
following global sentiment lower.
Fears over the spread of the highly infectious Delta variant
are denting sentiment at a time markets are on edge after the
U.S. Federal Reserve shocked markets with a hawkish tilt this
month.
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