CEE MARKETS-Central Europe's stocks, currencies rise after new Trump tariffs averted

WARSAW, Jan 22 (Reuters) - Central European stocks bounced and currencies firmed on Thursday after U.S. President Donald Trump abruptly stepped back from threats to impose tariffs as leverage to seize Greenland.

Tensions over Greenland have kept markets on edge, but news that there was agreement on a framework for a deal on ‌Denmark's autonomous territory and that new U.S. tariffs on European allies had been averted boosted sentiment.

"As far as the broader picture, I think that we're just playing TACO - the acronym that stands for Trump Always Chickens Out," said Piotr Bartkiewicz, an economist at Pekao.

"We have some sort of a settlement on Greenland that doesn't involve the use of force and it's probably very close to the status quo. So the risks of... further escalation in EU-US relations are off the table now, so we're back to more optimistic modes in markets."

Warsaw's blue-chip WIG 20 .WIG20 stock index was up 1.5%, while the main indices in Prague .PX and Budapest .BUX were up 1.2% and 1.1% respectively.

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The Hungarian forint EURHUF= gained 0.2% against the euro to trade at 383.75, while the Polish zloty EURPLN= firmed 0.1% to 4.214, building on the previous session's gains.

"The relatively subdued rhetoric of the U.S. President on Greenland was interpreted by the market as a de‑escalation of tensions, leading to a strengthening of CEE currencies," Santander Bank Polska said in a note.

The Czech crown EURCZK= was a touch weaker at 24.33 but was holding near recent levels after falling at the start of the year.

"On the other hand, it should be appreciated that it has not been significantly shaken by previous significant sell-offs in stock markets," Czech bank CSOB said. Simply put, it is currently accepting global turbulence with relatively stoic calm."

In Prague, shares in Czech utility CEZ CEZP.PR rebounded for a second straight day following a 15% drop on Monday and Tuesday - its worst two-day run since 2008.

The reasons for CEZ's sharp fall were not completely clear, although market participants said a combination of a broker downgrade, jitters over the length of the state's proposed plans to buy out minority shareholders and flows shifting to Czech defence group CSG's 3.8 billion euro IPO may have contributed.