Czech CEZ drags Czech stocks down on weak outlook

...outlook for next year amid a general selloff on stock markets.

The company said late on Monday it expected net profit growth of 19.3 percent next year to 34 billion crowns ($1.62 billion), and forecast earnings before interest, tax, depreciation and amortisation (EBITDA) to rise 8.9 percent to 69.4 billion crowns.

The shares eased slightly through the day, though the fall accelerated near the end of trading at 1500 GMT.

"The forecast was the trigger for the fall," said trader Tomas Karban of Wood and Company. "Now that the U.S. market is falling, sellers appear and sell more.

"I think this is a short-term technical correction of previous gains, that it will not have any long duration."

Several analysts said the forecast was below their expectations, but that CEZ had a history of being conservative in its outlooks and has in the past raised its guidance during the year.

CEZ is the largest Czech stock, and the drop on Tuesday wiped $1.56 billion off its market capitalisation to put it at $26.74 billion.

The Prague market, measured by the blue-chip PX index, of which CEZ is the biggest constituent, slipped 2.54 percent to 1,584.8 points, down from Monday's all-time closing high of 1,626.1.

CEZ, helped by expansion plans and growing electricity prices, reached an all-time intraday high of 1,013 crowns on Monday before closing at 1,010.

[PRAGUE/Reuters/Finance.cz]