beyondbrics

Despite improved business sentiment in Germany, central and eastern Europea stocks fell for a third consecutive day. The Hungarian forint was also trading down against the dollar again, after the government’s IMF confusion.

Meanwhile, Turkey became the latest object of Nouriel Roubini’s pessimism: the US economist warned the that the country’s current account deficit was being financed through volatile inflows.

Turkey‘s current account deficit has widened in each of the past eight months, and Roubini forecast it could reach 4.4 per cent of GDP this year. “While the rapid expansion of the deficit is a concern, the real issue is the deterioration in the quality of its financing,” he said in a note to clients. “At the same time that net foreign direct investment [in Turkey] has declined, more volatile sources of finances, like portfolio investment (specifically debt securities), have picked up.”

Meanwhile, the Turkish economy minister refused to speak about the fiscal rule, but said that both government spending and revenues would excede forecasts in 2010.

The ISE 100 was down 0.6 per cent to 58,285.65 in late trading.

Russia: the Micex fell 0.4 per cent to 1,334.66 in the afternoon session. Sberbank led losses – down 1.9 per cent to a seven-week low – after it reported a lower-than-expected rise in profits of $669m for the second quarter. Energy stocks helped the RTS index to rise 0.2 per cent to 1,388.64.

The Russian government auctioned its shortest maturity bonds in several years, as inflation forecasts scared investors from longer-term debt. It sold 3.1bn roubles ($100m) of bonds due in June 2011 at an average yield of 4.48 percent.

As the Moscow auto show opened, Opel said that Russian car sales may soon hit 3 million a year again.

Poland‘s WIG20 fell to a five-week low, down 0.7 per cent to 2,393.28, with banks leading the decline.

The country’s deputy prime minister said growth may exceed 3 per cent this year.

Czech Republic: the Prague stock exchange lost 0.9 per cent to 1,142.10.

However, power company CEZ stemmed its recent losses, after it and Hungary’s Mol saw their $909m plan to build a gas power station in Slovakia approved. CEZ’s shares rose 0.1 per cent, having fallen 5.3 per cent in the previous six sessions.

In Romania, the Bucharest index fell 0.6 per cent to 5,091.30.

In Hungary, the Budapest stock exchange lost 0.7 per cent, but the forint lost 0.9 per cent to 224.8 against the dollar. It has now lost 2.6 per cent this week.

Other currencies: the Russian rouble and the Czech koruna both shed 0.4 per cent against the dollar to trade at 30.95 and 19.69 respectively. The Romanian leu was also down, losing 0.3 per cent to 3.35.

The Polish zloty was flat after yesterday’s rate decision, as was the Turkish lira.