* Emerging equities up, central bank decisions in focus
* Broadly lower oil prices seen undercutting inflation
* Thai stocks jump on talk of ex-Prime Minister exile
By Peter Apps
LONDON, Aug 7 (Reuters) - Emerging equities rose on Thursday
with investors perceiving a slightly more benign inflationary
backdrop for policy meetings by emerging and developed world
central banks.
With oil and commodities taking their biggest ever monthly
fall in July, a slight rise in crude prices on Thursday hit some
markets but analysts said central banks still had much more room
to manoeuvre than if oil was still approaching $150 a barrel.
New York crude <CLc1> was up 1.43 percent at $120 a barrel.
Both the Bank of England and the European Central Bank were
expected to leave rates on hold on Thursday, while the Czech
central bank cut rates by a quarter percentage point to 3.5
percent [], weakening the crown currency [].
"Overall, people are looking at the interest rate
decisions," said Lars Christiansen, head of emerging market
research at Danske Bank. "The oil price is very important. As
it has come down you have seen a slight increase in risk
appetite."
Benchmark emerging equities <.MSCIEF> were 0.33 percent
stronger on Thursday by 1008 GMT, but are still down almost 19
percent so far this year hammered by inflationary worries and
concerns over the health of the global economy.
Stocks in the Czech Republic <> were up 1.19%, Romanian
stocks <> up 2.44 percent and South African <.JTOPI> up
0.58 percent.
But Christiansen said a broad fall in energy prices made the
picture slightly better.
"It means we are looking at an economic slowdown rather than
an economic slowdown and high inflation," he said. "That means
policymakers have to make slightly less difficult decisions."
A top Indian government official said on Thursday its
headline inflation rate -- currently at a 13-year-high just
below 12 percent -- should fall below double digits by the end
of the fiscal year. [].
A Reuters poll showed South African economic confidence
rising for a second straight month in July, climbing away from
record 5 1/2 year lows on an improved inflation and currency
outlook [].
"Every dark cloud has a silver lining," said Brait Merchant
Bank economist Colen Garrow. "The inflation outlook is a little
better, the outlook on the currency is a lot better. The fuel
price outlook again is tremendously better. Maybe it's just
given us hope relief is in sight."
The South African rand <ZAR=> was up 0.09 percent, although
occasionally flirting with negative territory, while the Turkish
lira <TRY=> also oscillated either side of flat with analysts
warning that the end of a court case to ban the ruling party did
not necessarily signal the end of political instability.
The Czech crown <EURCZK=> was 0.01 percent up just ahead of
the rate decision, with the Polish zloty <EURPLN=> up 0.07
percent.
On Wednesday, Russia's rouble staged its biggest daily
percentage fall against a dollar/euro basket since mid-May, but
brokerage ING said its current weakness -- fuelled in part by a
sharp sell-off in Russian equities -- represented a buying
opportunity [].
Thailand's stock market rose 4.29 percent on Thursday on
intensifying speculation that ousted prime minister Thaksin
Shinawatra would go into exile, signalling a possible easing of
more than two years of political tension. []
But a spokesman for Thaksin said he would return to Thailand
from an overseas trip by August 11 as planned [].
Emerging sovereign debt spreads <11EMJ> were one basis point
narrower at 277 above U.S. treasuries.
(Editing by Ruth Pitchford)
