(Adds rebound, rise of government bonds in region)

* Strong Fidesz election win fuels fear of more burdens on banks

* OTP Bank shares off lows, but bucks rise of other Budapest shares

* Re-elected PM Orban to hold news conference at 1200 GMT

By Sandor Peto

BUDAPEST, April 7 (Reuters) - Hungarian stocks recouped some of Monday's early losses ahead of a news conference at which newly re-elected Prime Minister Viktor Orban may detail planned economic policy changes.

Orban, who has clashed repeatedly with the European Union and foreign investors over policies that have hit banks and foreign energy firms, scored a landslide victory in the weekend vote to secure a second successive term. ID:nL6N0MY02H

Hungary's largest bank OTP OTPB.BU saw its shares rebound from an early fall of more than 1 percent, but it remained 0.7 percent lower on the day.

Other shares on the Budapest Stock Exchange had mostly recovered from early falls by midday, bucking a trend for profit-taking that led to fall in wider European stock markets.

Orban will speak at 1200 GMT.

Preliminary results suggest his centre-right Fidesz party may have again secured a two-thirds majority in parliament. Far-right Jobbik also gained, winning one in every five votes.

Investors are concerned that Orban may take his strong voter backing as a mandate to further burden Hungary's mostly foreign-owned banks and other sectors in his efforts to stabilise the budget.

"The Orban administration has not so far excelled in developing policies conducive to currency stability," Commerzbank analysts said in a note.

"Since the last general election, the forint has lost nearly 14 percent against the euro. I therefore counsel against interpreting the election result as positive for HUF."

Markets will also watch the National Bank of Hungary's first post-election comments for any signs that it could cut its base rate further from a record-low 2.6 percent to support growth despite jittery global sentiment in emerging markets.

There have been signs the central bank and the government may tolerate a weaker forint even though the unit is just 6 percent firmer from its record lows against the euro. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

TAKE A LOOK-Hungary's 2014 parliament election ID:nL6N0MY09B

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During the election campaign, the government promised a scheme to help households who borrowed in Swiss francs and euros and whose costs have surged in the past years due to a shift in the exchange rate.

The scheme, which will be announced after court rulings in the next few weeks, may come at the cost of heavily taxed banks and could further hinder lending in Hungary, which has been shrinking since the 2008 global crisis.

"With a new 2/3 majority, the worry is that they could accelerate the foreign currency lender programme, and the windfall taxes could be tapered more slowly," said Akos Kuti, analyst of Equilor in Budapest.

Hungary's blue-chip main index .BUX eased 0.2 percent on Monday and remains 2.1 percent lower since the end of 2013. During that time, its peers in Prague .PX and Warsaw .WIG20 have posted gains of 2-3 percent.

"The Hungarian market has become cheap," one Budapest-based equity trader said. "Market players hope the government will favour a more balanced recovery now and will reduce its windfall taxes."

The forint eased 0.4 percent by 1142 GMT to 306.8 against the euro.

Hungary's debt burden, the region's highest debt at about 80 percent of economic output, has left the currency more vulnerable than others in Central Europe to this year's wobbles in emerging markets.

Central European government bonds extended their rally as foreign investors continued to buy high-yielding and relatively low-risk debt from the region and the euro zone's periphery.

Poland's 10-year bond yield PL10YT=RR hit an eight-month low of 4.1 percent. Junk-rated Hungary's corresponding bond yield HU10YT=RR dropped 5 basis points to 5.55 percent.

"Uncertainty over the economy remains now but everybody remembers that this government has kept a firm grip on the budget," a fixed income trader in Budapest said.

(Reporting by Sandor Peto; Editing by Catherine Evans)

((sandor.peto@thomsonreuters.com)(+36 1 327 4744)(Reuters Messaging: sandor.peto.thomsonreuters.com@reuters.net)) 

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