* Euro zone debt worries curb gains from Irish rescue
* Hungarian and Polish CDS jump, Hungary rate decision eyed
* Egyptian pound sinks to five-year low
By Duncan Miriri
LONDON, Nov 29 (Reuters) - Emerging stocks recovered some
ground on Monday from recent losses but were held back by euro
zone debt worries, while Hungarian assets came under pressure on
pension concerns and ahead of an interest rate decision.
EU finance ministers agreed an 85 billion euro ($115
billion) rescue package for Ireland on Sunday but the bailout
did not erase market concerns over the finances of other euro
zone countries including Portugal and Spain.
The MSCI emerging stock index <.MSCIEF> was up 0.39 percent,
after sliding more than 1 percent on Friday, outperforming the
benchmark index of global stocks <.MIWD00000PUS>, which was just
0.07 percent higher.
"The recovery is not particularly strong. Last week
contagion appeared in Portugal and Spain (but) the weekend
announcement only addressed the Ireland issue, with some details
lacking," said Gyula Toth, emerging markets strategist at
Unicredit in Vienna.
"We believe this recovery will not be too powerful or
long-lasting until the issue of Portugal and Spain is
addressed."
The cost of insuring Hungarian debt for five years rose by
14 basis points to a near three-month high of 375 basis points,
while Poland's CDS was up 5 basis points to a three-month high
of 153 basis points, according to Markit.
The spread between emerging market sovereign debt <11EMJ>
and U.S. Treasuries widened 3 basis points, to 251 basis points.
Hungarian shares <> lost 1 percent while the forint
currency <EURHUF=> fell nearly 0.50 percent to a two-month low
against the euro after government pension reforms that it says
are aimed at strengthening the country's fiscal position.
Officials want to scrap private pension funds, a policy step
investors felt was going too far, and which sparked a massive
sell-off in Friday's session. []
"Unfortunately it looks like Poland is going a bit in the
same direction," Toth said.
Prime Minister Donald Tusk is expected to unveil changes to
Poland's costly private pension funds this week as his
centre-right government tries to rein in public debt and a large
budget deficit.
Tusk has ruled out "revolutionary" measures like suspending
contributions to private funds. []
Polish stocks <> slid by 0.66 percent while the zloty
lost 0.16 percent against the euro <EURPLN=>, approaching
four-month lows hit last week.
Policymakers voted to keep interest rates on hold at their
meeting last week, a decision that the National Bank of Hungary
is expected to emulate on Monday. []
EGYPTIAN POUND DOWN
The Egyptian pound <EGP=> sank to a five-year low against
the dollar due to lower risk appetite and lack of support from
the central bank, traders said.
The country held a parliamentary election on Sunday, with
the ruling National Democratic Party (NDP) being challenged
mainly by the biggest opposition bloc, the Muslim Brotherhood.
[]
Analysts did not expect the election to have much impact on
markets. The yield on Egypt's 10-year bond was up by 4 bps to
4.59 percent.
"They've had a few thousand years of political stability,
they are not going to let it slip now," said Gabriel Sterne,
economist at frontier markets brokerage Exotix.
South African shares <.JTOP1> turned flat midway through the
session after notching up some early gains, while the rand
<ZAR=> rose 0.5 percent against the dollar.
Government bonds continued losses from Friday, with yields
rising, due to persistent concerns about the impact of the debt
crisis in the euro zone, traders said.
