BUDAPEST (Thomson Financial) - Central European shares headed lower midday as the region's markets broke step with larger counterparts, and the likes of MOL, (News) CEZ (News) and PKO weighed on indices as reporting season draws to a close.

At 11:29 a.m. Budapest BUX dipped 0.8 percent, Prague's PX dipped 0.2 percent and Warsaw's WIG20 fell 1 percent.

'It's only today that we are seeing this (the region's markets being out of step with western peers),' said Tibor Barath, a broker at Erste Bank. 'Last week this was not the case, so it is too early to start talking about trends, volume is low everywhere'.

But the broker said questions over quarterly results in Budapest are leading to profit-taking in Hungary this morning.

'With OTP there have been questions over its Russian unit, while growth at MOL was decidedly low, with the price of oil so high,' he said. 'There could be a sustained period of poor sentiment towards Budapest after this round of profit-taking.'

MOL fell 2 percent, while OTP Bank edged up 0.3 percent to 7,360 forint. Today ING cut its target price on OTP to 10,400 forint from 11,600, but maintained its 'buy' rating.

In Prague, CEZ fell 0.9 percent following a cut to 'equal-weight' at Morgan Stanley, with a reduced target price to 1,434 crowns. 'The regions markets are slowing now that results are winding down, but sentiment has improved compared to a few weeks ago,' a Prague trader said.

Zentiva inched lower 0.3 percent before its results release today. The company is expected to show a 23 percent drop in net profit due to the strengthening Czech crown.

Miner New World Resources (NWR) was the exchange's strongest gainer, with a 5 percent rise, boosted by positive sentiment in the coal sector.

In Warsaw, lenders Pekao, down 0.3 percent, and PKO BP, (News) down 1 percent, led losses, while copper miner KGHM, up 1.7 percent, bucked the trend after management said it would raise its dividend by around two thirds to 1.8 billion zlotys.

Telecom company TPSA was up 0.2 pct after its share price was adjusted to reflect that it began trading without the right to last year's dividend. But the markdown has lopped several points off the Warsaw's blue-chip WIG20 index.

'Everybody's looking ahead for a long weekend already, so trading is rather thin,' said Tomasz Dudz, said a dealer at BRE Bank brokerage in Warsaw. 'TPSA is weighing on the market because it's gone ex-dividend today.'

tf.TFN-Europe_newsdesk@thomsonreuters.com; edward.krudy@thomsonreuters.com

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