Sept. 17 (Bloomberg) -- Erste Group Bank AG retreated from its highest in more than six months, leading a drop for Czech shares, as concern of a deepening economic slowdown in China outweighed the boost from central bank measures to help lenders.
Austria’s Erste declined 1.4 percent to 466.20 koruna by the close in Prague. The stock jumped 9.1 percent last week, lifting its 14-day relative strength index to 75, above the 70 level that suggests to technical analysts an asset may be overbought and poised for a decline. The RSI last traded at 71 today.
European stocks slipped from a 15-month high as Citigroup Inc. cut China’s 2013 growth forecast to 7.6 percent from 8 percent and on speculation China’s scope for economic stimulus is limited by the U.S. Federal Reserve’s quantitative-easing program. Leaders meet this week to discuss Europe’s debt. European Central Bank officials agreed to implement an unlimited bond-buying program and the Fed unveiled a third round of asset purchases last week.
“Investors are re-assessing the probability of the Chinese government or central bank rushing in with a new massive wave of economic stimulus,” Marek Hatlapatka, a stock analyst at Cyrrus AS brokerage in Brno, Czech Republic, wrote in a report today. “The steps taken by Fed last week are seen as a potential reason for China to delay its stimulus.”
The Czech Republic’s PX equity index, in which Erste has a 23 percent weighting, dropped 0.8 percent, retreating from its highest since March.
Erste was the third-most traded stock today in Prague. CEZ AS, the country’s largest electricity producer, which was the most active, slid 0.4 percent. New World Resources Plc, the biggest Czech coking-coal producer, fell 1.6 percent to 92.01 koruna as Europe’s benchmark coal derivatives slid 0.2 percent to $99.55 a metric ton in the Netherlands.
To contact the reporter on this story: Krystof Chamonikolas in Prague at email@example.com
To contact the editor responsible for this story: Gavin Serkin at firstname.lastname@example.org