EMERGING MARKETS-Emerging stocks, FX down ahead of ECB

                                
* MSCI emerging stocks index down, off one-month peak
                                
 * Market watching ECB policy verdict
                                
 * Debt spreads narrow      
                                
 
                                
 By Gordana Filipovic
                                
 BELGRADE, March 4 (Reuters) - Emerging market stocks slid on
Thursday from one-month peaks on Wednesday while central
European currencies edged lower ahead of the European Central
Bank's monetary policy meeting.
                                
 The South African rand <ZAR=> held near one-month highs
against the dollar as a Reuters poll showed economic confidence
in the country rose in February on optimism the economy would
growth this year and next.
                                
 Emerging European currencies gave up some of the previous
day's gains ahead of the ECB meeting and markets were catiously
watching developments in the Greek debt crisis as Athens issued
a critical bond issue.
                                
 The ECB is expected to hold interest rates at a record low
1.0 percent but investors were focusing on any withdrawal of the
extra liquidity it has provided to the banking system during the
global financial crisis since 2008.
                                
 "There are concerns that if they have more problems in the
euro zone or return to recession, that would have an impact on
emerging markets. There is a lot of nervousness coming from the
Greek story," said Vlad Sobell, an economist at Daiwa in London.
                                
 "Any tightening in the euro zone will not be good news for
central Europe, they have strong trade links."
                                
 The MSCI benchmark emerging share index <.MSCIEF> was down
0.6 percent, tracking broader moves in its Asian <.MSCIAPJ> and
global counterparts <.MIWD00000PUS>.
                                
 In emerging Europe, the Budapest <.BUX> and Istanbul
<.XU100> markets led the decline and were down around 0.5
percent on the day.
                                
 The Hungarian forint fell a quarter percent to 266.48 per
euro <EURHUF=> while the Czech crown lost a third of a percent
to 25.82 per euro <EURCZK=>.
                                
 Emerging sovereign debt spreads <11EMJ> narrowed by one
point to 284 basis points over U.S. Treasuries.
                                
 "General improvement in credit following the announcement of
large deficit cuts by Greece has had benign effects on emerging
market assets," BNP Paribas said in a note.
                                
 Debt-laden Greece launched a critical bond issue on Thursday
and urged Germany and other EU partners to send a clear signal
of confidence in Athens to financial markets that would allow it
to borrow more cheaply. [nLDE6230PC]
                                
 Turkey's benchmark bond yield rose to a 2010 high after the
central bank warned that annual inflation would remain high over
the next six months. [nLDE6230LI]
                                
 In the Middle East, Abu Dhabi's share index <.ADI> ended
lower for the first session in five, dragged down by property
and bank stocks, with investors shifting from the UAE to better
performing markets in the region.
                                
 Five-year credit default swaps inched up across emerging
markets, but no big moves were reported. Markit's CEEMEA index
rose to 217 bps from 215.6 bps at Wednesday's close. Its West
European index moved up to 77.1 bps from 76.2 bps on Wednesday.
  (Additional reporting by Natsuko Waki; Editing by Susan
Fenton)