Emerging Markets-Equities lowest since Aug 2007

                                
 * Emerging equities hit lowest since August 2007
                                
 * Weaker commodity, oil prices hit producers
                                
 * Central European currencies broadly weaker
                                
 
                                
 By Peter Apps
                                
 LONDON, Aug 5 (Reuters) - Emerging equities hit their lowest
level since Aug. 22 last year on Tuesday, dragged down with
other global markets by worries about a worldwide economic
slowdown, while central European currencies fell on rate cut
expectations.
                                
 With commodity and oil prices falling around the world after
recent rallies, producers have been hit. Russian equities and
the South African rand both lost out as worries grow of
recession and slower growth, particularly in the consuming
nations of the developed world.
                                
 Benchmark emerging equities <.MSCIEF> briefly hit a new year
low of 995.34 before recovering slightly to 909.01 by 1000 GMT,
down 0.93 percent on the day.  They are now down nearly 20
percent this year.
                                
 Russian stocks <.IRTS>, hit by falling crude prices and a
battle for control of oil giant BP's local joint venture,
dropped 2.78 percent and are now down 19.5 percent this year.
                                
 South Africa's rand <ZAR=> lost 1.21 percent against the
stronger dollar.
                                
 "Overall, it is the commodity producers that are getting
hammered," said Henry Stipp, fund manager at Threadneedle
Investments.
                                
 Central European stock markets were broadly stronger, with
Czech shares <.PX> up 0.02 percent, Polish <.WIG20> up 0.62
percent and Hungarian <.BUX> up 1.71 percent.
                                
 But central European currencies, some of the best performing
in emerging markets as investors have used them as a form of
safe haven, were broadly lower.
                                
 "Fixed income is not really trading in correlation with
equities," said Stipp. "And it seems the central European
currencies have gone about as far as they can go."
                                
 The Czech crown <EURCZK=>, up more than 10 percent so far
this year, was down 0.15 percent, with the Polish zloty
<EURPLN=> down 0.27 percent and the Hungarian forint <EURHUF=>
down 0.68 percent.
                                
 Traders said a broadly stronger dollar was pressuring the
currencies, with the Czech crown also increasingly pricing in an
interest rate cut despite some analysts expecting it to keep
rates flat.
 (For report please double click on [ID:nL5598663])
                                
 Romania's leu <EURRON=> rose 0 15 percent, steadying close
to the previous session's 2008 high against the euro, with
hawkish comments from the central bank offsetting neighbourhood
weakness. Central bank governor Mugur Isarescu said rising
labour costs represented the bank's main concern as it could
trigger a second round of inflation [ID:nL5552650].
                                
 Kenya's shilling <KES=> was 0.35 percent stronger against
the dollar a day after ratings agency Standard & Poor's said it
had revised its outlook on the country to positive from stable,
reflecting greater stability after tension and violence earlier
this year due to disputed election.
                                
 The agency said the revised outlook reflected the success of
a power-sharing coalition government in continuing pro-growth
reforms and policies. It reaffirmed Kenya's B long-term and
short-term sovereign credit ratings. [ID:nWNA6260]
                                
 Benchmark emerging debt spreads <11EMJ> were one basis point
wider at 287 above U.S. treasuries.