By Krisztina Than

BUDAPEST, March 21 (Reuters) -Central European currencies firmed and stocks rebounded on Tuesday as global sentiment improved after the rescue of troubled lender Credit Suisse by its Swiss rival UBS UBSG.S, with shares in Hungary's OTP jumping 3.1% in early trade.

Hungary's forint EURHUF=D3, which hit an 11-week low on Monday past 400 to the euro, was trading at 392 to the euro, rising 1.07% and outperforming its peers.

"The forint's exchange rate reversed (its retreat) above the 200-day moving average ... with an improvement in international sentiment coming at the best possible time," brokerage Equilor said in a note. "Today's trading also looks exciting with volatility remaining above average."

The Hungarian central bank holds a tender for short-term discount bills on Tuesday, where it is offering 1 trillion forints worth of bills NBHJ as part of its efforts to drain forint liquidity from the market. It is also holding FX swap tenders offering euro liquidity to banks. NBHM

The bank has maintained an 18% quick deposit rate since last October, when the forint hit record lows beyond 434 to the euro. Its base rate of 13% is also the highest in the European Union, with annual inflation running at 25.4% in February.

Apart from watching news related to the bank sector in Europe, investors are also looking forward to this week's meeting of the U.S. Federal Reserve.

Investors will be watching to see "whether the tensions in the banking system would prevent further rate hikes," said analysts at Magyar Bankholding in a note.

The Polish zloty EURPLN= also firmed, by 0.2% to 4.6965 to the euro, along with the Czech crown EURCZK=.

Analysts at Commerzbank said the zloty could have more room to firm this year as inflation is expected to decline.

"The Polish inflation trend looks set to turn more benign over the coming quarters as it has done in the Czech Republic (Hungary remains an exception in the hawkish direction)," Commerzbank said.

"This in turn supports our view that the zloty could appreciate by the end of this year, other disruptive market factors permitting."

Stock markets across the region gained on Tuesday, with Warsaw's WIG 20 index .WIG2 rising 1.3% and Budapest .BUX up 1.6% by 0833 GMT.

Prague's index, which on Monday hit a two-month low, was also up 1.3%, benefiting from improved sentiment. Shares in utility CEZ CEZP.PR rose, but underperformed, after 2022 earnings indicated a record dividend. Profits this year are set to fall.

Reporting by Krisztina Than in Budapest, and Pawel Florkiewicz in Warsaw; editing by Mark Potter

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