* Greek woes cap emerging mkt gains ahead of U.S. data
* Indian shares hit 4-week high; Turkish markets recover
* Czech crown underperforms peers; Icelandic talks fail
By Sebastian Tong
LONDON, Feb 26 (Reuters) - Mounting concern over Greece's
fiscal woes and caution ahead of key U.S. data curbed emerging
market gains on Friday, but Turkish markets recovered ground as
fears of a clash between the country's government and military
abated.
Indian shares <> hit a four-week high after a national
budget that is expected to boost consumption while a politically
damaging referendum loomed large in Iceland following the
collapse of talks with Britain and the Netherlands on the
repayment of over $5 billion lost by the country's banks.
Greece continued to dominate market sentiment as concerns
persisted about a possible further downgrade of the euro zone
member's credit ratings after the previous government was
revealed to have understated its budget deficit by half.
On Friday, Greek Prime Minister George Papandreou told
parliament after a visit by European Union economic inspectors
that the worst fears about Greece's economy had been confirmed.
[]
"There is a lot of uncertainty right now. There doesn't seem
to be agreement on Greece within the European Union and there's
a block of data coming out from the U.S. later today," said
Guillaume Salomon, senior analyst at TD Securities.
The second estimate of the U.S. fourth-quarter gross
domestic product and existing home sales figures for January are
due to be released later in the day.
"The market is looking for some direction but it's not going
to have it for a while as we have some major central bank
meetings coming up next week," Salomon added.
The emerging stocks index <.MSCIEF> was up nearly 1 percent
by 1205 GMT but looked set to end the week flat after two
successive weekly gains.
Emerging sovereign debt <11EMJ> traded four basis points
tighter over U.S. Treasuries.
Indian shares <> gained more than 1 percent after the
government unveiled plans to raise the tax exemption limit for
individuals and bolster its farming expenditure. []
Emerging European bourses were mixed, with Czech stocks
<> retreating for the fourth straight session to languish at
two-week lows.
Turkish shares <> shook off four straight days of
losses to rise 1.3 percent.
CZECH WATCH
The lira <TRY=> also regained some of its poise at the end
of a volatile week that saw the currency fall to a 14-month low
and lose nearly two percent of its value against the dollar.
Fears of a clash between the secularist military and the
Islamist-rooted government eased slightly eased as three of the
roughly 50 officers detained in an investigation into an alleged
coup plot were released. []
Russia's rouble retreated after rising for six straight
sessions to 14-month highs against its dollar/euro basket
<RUS=MCX>.
Poland's zloty stood its ground against the euro <EURPLN=>
while Romania's leu firmed to a two-week high <EURRON=>, but the
Czech crown underperformed its regional peers <EURCZK=>,
weakening versus the common currency for sixth straight session.
The Czech Republic's struggle to curb its state spending is
increasingly coming under investor scrutiny.
"Next week, Czech markets will be watching developments over
the recent maternity bill enacted by parliament, which bodes
poorly for the stability of public finances," BNP Paribas said
in a research note.
Czech Prime Minister Jan Fischer said he expected the
economy to expand in 2011 at only half the rate forecast by the
finance ministry. []
Meanwhile, attempts by Iceland to reach a new deal with
Britain and the Netherlands over Reykjavik's debt collapsed,
raising the likelihood of a referendum on a previous accord on
March 6. []
Despite the failure of the talks, investor reaction was
muted, with credit default swaps (CDS) to insure Icelandic debt
stable.
Five-year Icelandic CDS were quoted at around 500 bps in
illiquid trade, down from 520 bps in the previous day, said data
provider Markit.
(Reporting by Sebastian Tong; editing by John Stonestreet)
