* Stocks up on positive global sentiment, results
* China, United States spat on currency continues
* Russia's rouble slips to new lows
By Peter Apps
LONDON, Jan 28 (Reuters) - Emerging stocks and currencies
rose on Wednesday amid more signs of resilience from global
investors and consumers, though Russia's rouble hit new lows as
the passing of tax deadlines ended a temporary spike in demand.
A war of words between the United States and China over the
latter's foreign exchange strategy looked to be rumbling on and
possibly escalating, prompting fears the economic slowdown might
help spur protectionism that could deepen the slump.
However, benchmark emerging equities <.MSCIEF> were up 1.62
percent by 1145 GMT, with South Africa <.JTOPI> and Turkey
<> leading the pack both up around 2.50 percent each.
Broader global equities were also up for a third day after
reassuring corporate results on Wall Street and some better than
expected readings on consumers in the euro zone, while investors
eyed a Federal Reserve meeting later in the day.
Benchmark emerging sovereign debt spreads <11EMJ> were 11
basis points narrower at 647 bps over U.S. Treasuries, another
sign of improved risk appetite.
"Broadly, everything is up although overall is very quiet,"
said Dresdner Kleinwort emerging foreign exchange strategist Jon
Harrison. "The main exception is the rouble."
But he said risk appetite remained cautious and said markets
were uneasy over the risk of trade rows.
"Obviously in an environment like this one of the things
markets are worried about is protectionism."
Newly appointed U.S. Treasury Secretary Timothy Geithner
branded China a currency manipulator last week, although the
White House said on Monday that a formal position would only be
stated in current months.
A Chinese diplomat in London said on Wednesday the United
States had enough evidence to know China did not manipulate its
exchange rate and that it would be unfair for Washington to
change its view suddenly [].
ROUBLE FALTERS
Russia last week called a halt to its string of
mini-devaluations of the rouble by widening the corridor in
which it could trade against the euro-dollar basket.
Initially, the rouble had strengthened somewhat as companies
sold dollars for roubles to make tax payments, but as tax
deadlines faded, the slide looks to be resuming with the
currency down 1.19 percent against the basket <RUS=MCX>.
Russia has spent some $200 billion, or a third of its
reserves, since August in order to cushion the rouble's fall,
anxious to avoid a sudden devaluation and the resulting
political fallout.
The Israeli shekel <ILS=> was 0.43 percent weaker, a move
attributed to a fallout from a rate cut earlier in the week
rather than renewed violence in the Gaza Strip.
Serbia's central bank intervened in the foreign exchange
market on Wednesday after the dinar <EURRSD=> hit a new record
low having lost more than 25 percent since early October. The
bank has spent more than 1.2 billion euros trying to slow the
depreciation. []
Central European currencies were broadly stronger, with the
Czech crown <EURCZK=> up 0.60 percent and the Polish zloty
<EURPLN=> up 0.70 percent.
South Africa's rand <ZAR=> fell 0.50 percent as inflation
reported came in slightly below forecasts, hardening the case
for an aggressive rate cut next week [].
Turkey's lira <TRY=> gained 0.43 percent. Turkish Prime
Minister Tayyip Erdogan said on Wednesday he might hold talks
with the IMF in Davos to iron out differences over a major loan
after talks were suspended on Monday for 10 days [].
"There has been a sense of panic upon the announcement of
the negotiation suspension between the IMF and the government,"
said BNP Paribas in a research note.
"(But) we continue to believe that the ongoing row is a sign
of intense negotiations ... ongoing, which isn't necessarily as
negative and could lead to a deal before elections."
(Editing by Patrick Graham)
