Nov. 14 (Bloomberg) -- Central European stocks rebounded from a two-week low, with the Czech benchmark index posting its biggest gain this month, on earnings reports and as some investors said equity prices were now cheap.

CEZ AS and KGHM Polska Miedz SA led the advance after the companies posted profit that beat analysts' estimates. OTP Bank Nyrt. and Foldhitel es Jelzalogbank Nyrt. climbed after Hungary's biggest mortgage lenders said earnings increased in the third quarter even as the country's economy contracted in the period.

The Czech PX Index jumped 4.5 percent to 810.20, the biggest fluctuation among indexes included in world benchmarks. Poland's WIG20 Index increased 1.5 percent,

``Most of negative developments have been efficiently priced in,'' said Jiri Lengal, who manages the equivalent of $115 million of eastern European stocks at Investicni Spolecnost Ceske Sporitelny AS in Prague. ``Stock prices look very attractive now, but we cannot exclude a huge decline.''

The NTX Index of 30 companies in the region advanced 2.6 percent, rising for the first time this week. Hungary's BUX Index jumped as much as 7 percent and closed up 0.2 percent.

PX index shares trade at 6.8 percent the average of its members' earnings, compared with about 16 times at the beginning of this year, according to Bloomberg data.

`Strong Fundamentals'

CEZ, the largest Czech utility, surged 60 koruna, or 8.3 percent, to 782, climbing for the first time in four days. Third- quarter profit rose 46 percent after electricity prices and production from nuclear and hydropower generators increased, the company said yesterday.

That exceeded the 11.3 billion-koruna median estimate of eight analysts surveyed by Bloomberg News.

``The results are very strong and confirm the company's strong fundamentals,'' Atlantik Financial Markets AS analysts wrote in a note to clients today.

KGHM jumped 1.28 zloty, or 5.1 percent, to 26.3, gaining the most in more than a week. Poland's sole copper producer posted a smaller-than-expected decline in third-quarter profit as it gained from hedging transactions that mitigated a plunge in prices.

OTP, Hungary's biggest bank, advanced 85 forint, or 3.3 percent, to 2,700 forint, rising for a second day. Third-quarter profit tripled to a record 168.7 billion forint ($802 million) on a gain from the sale of its insurance division.

Foldhitel es Jelzalogbank, the country's second-largest mortgage bank, increased 49 forint, or 6.9 percent, to 760, snapping a three-day drop. Profit increased 21 percent, boosted by lending at its commercial banking unit.

Hungary's gross domestic product fell 0.1 percent in the third quarter from the previous three months, the Budapest-based statistics office said today as the global financial crisis engulfed the country, setting it on a course to follow the euro region into its first recession in 15 years.

To contact the reporter on this story: Pawel Kozlowski in Warsaw pkozlowski@bloomberg.net; Lenka Ponikelska in London lponikelska1@bloomberg.net

Last Updated: November 14, 2008 11:29 EST