Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

Banks Lead Worst Drop for Czech Stocks in 7 Months: Prague Mover

Don't Miss Out —
Follow us on:

Feb. 26 (Bloomberg) -- Financial companies led the steepest drop in Czech shares in seven months as electoral deadlock in Italy spurred concern the euro area’s debt crisis will worsen.

Erste Group Bank AG of Austria tumbled 3.4 percent by the close in Prague, while Komercni Banka AS declined 3.3 percent and Vienna Insurance Group AG slid 2.1 percent. The PX index, where the three companies have a combined 57 percent weighting, fell 2.1 percent, its biggest slump since July 23.

Lenders and insurers were the biggest decliners in European stock market trading while Italy’s borrowing costs hit a three-month high as inconclusive elections threaten to derail 15 months of budget cuts under Prime Minister Mario Monti. Silvio Berlusconi, the ex-premier fighting a tax-fraud conviction, got the second-most votes after the pro-austerity Democratic Party.

“New voting could favor Berlusconi, whose support rocketed before the elections because of Monti’s unpopular austerity,” Marek Hatlapatka, a stock analyst at Cyrrus brokerage in Brno, Czech Republic, wrote in a report to clients today. “That is very negative information for stocks and the euro.”

Komercni Banka, which owns about 7.9 billion koruna ($406 million) of Italian sovereign bonds, had its worst day this month. The Czech unit of Societe Generale SA slid to 3,916 koruna, paring February gains to 2.6 percent. Komercni share turnover was 159 percent of the three-month daily average.

“While risk premiums on Italian bonds rose today, they remain well below last year’s levels,” Hatlapatka wrote in an e-mail to Bloomberg News. “I can’t see a reason for a bigger selloff in Komercni Banka shares because of Italian bonds.”

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

To contact the editor responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net