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Erste, Komercni Lead Czech Stock Index Lower on Capital Concern

Jan. 4 (Bloomberg) -- Czech stocks dropped from a two-month high as concern that European lenders will need to raise more capital sent Erste Group Bank AG and Komercni Banka AS lower.

The PX index slipped 0.7 percent to 927.4 at its 4:28 p.m. close in Prague. Austria’s Erste fell 3.5 percent and Komercni, Societe Generale SA’s Czech unit, slid 1.5 percent, outweighing gains of more than 1.5 percent for phone operator Telefonica Czech Republic AS and mining company New World Resources Plc.

Global stocks retreated after Italy’s UniCredit SpA offered a 43 percent discount on its 7.5 billion-euro ($9.8 billion) share offering as euro-area bans struggle to cover losses and plug capital gaps. The European Central Bank reported overnight deposits from financial institutions rose to an all-time high.

The UniCredit “news also affected most other banks because it increased fear that more capital boosts will be necessary,” Josef Nemy, a Komercni analyst in Prague, wrote in a report. “The bad mood in the European banking sectors also hit the Prague bourse.”

The koruna weakened as much as 1 percent, the most since Dec. 12, and last traded 0.8 percent down at 25.90 per euro.

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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