* Hungary bond yields rise amid euro zone debt worries
* MSCI emerging equity index inches up
* Rouble jumps to 2-week high on tax payments
By Duncan Miriri
LONDON, Nov 25 (Reuters) - Yields on Hungarian bonds rose on
Thursday on domestic concerns and fears the euro zone debt
crisis will spread further, with emerging assets otherwise
steady in markets thinned by the U.S. Thanksgiving holiday.
Emerging shares, as measured by the MSCI emerging equity
index <.MSCIEF> edged up 0.11 percent to 1097.95, while emerging
sovereign debt <11EMJ> was barely changed, narrowing by 1 basis
point to trade at 246 bps above U.S. Treasuries <11EMJ>.
Traders said stocks had been supported by a rise in Asian
shares, led by the tech and retail sectors, in anticipation of a
busy U.S. shopping season.
But concerns that Ireland's debt and deficit crisis will
spread to other peripheral euro zone countries remained at the
forefront of investors' minds.
"It is affecting the region badly. People are watching for
contagion and it's a drag on the market," said Roderick Ngotho,
CEEMEA forex strategist at Royal Bank of Scotland.
Hungarian government bond yields increased by 10-20 basis
points, and the debt agency cut its 12-month bill auction, as
the crisis and uncertainty about central bank legislation
undermined sentiment [].
Domestic policy has added to investors' caution about
Hungary, one of the most indebted nations in emerging Europe.
The cost of insuring Hungary's debt for five years in the
credit default swap market went up to 337 basis points from 330
basis points, according to data from Markit.
The rate was the highest since mid-September, and has shot
up from 269 basis points on Nov. 11.
"The recent escalation of risks from peripheral Europe has
highlighted again the potential contagion risks that EEMEA
faces," said analysts at BNP Paribas in a client note.
The forint dropped 0.37 percent to an eight-day low
<EURHUF=> and Hungarian stocks <> fell 0.7 percent.
The rouble <RUS=MCX> firmed 0.2 percent against the
euro-dollar basket, having pared earlier gains which had taken
it as far as 35.94 against the basket.
Traders attributed the gains to firms seeking roubles for
payment of tax on natural resources, which is due by Nov. 25.
They also cited the gains in Asian stocks as well as this week's
rally in oil prices.
ZLOTY RETREATS
The Polish zloty <EURPLN=> eased 0.5 percent against the
euro following the previous session's gains, which were spurred
by bullish comments from the central bank governor.
Turkish assets were mixed with stocks <> coming off by
0.8 percent while the lira <TRY=> rose by a quarter of a
percentage point against the dollar.
Ratings agency Fitch lifted its outlook on Turkey's rating
to "positive" from "stable" on Wednesday, in a move analysts
said could see Ankara rewarded with investment grade status
after a general election next June. []
The South African rand <ZAR=> was steady against the dollar.
(Additional reporting by Carolyn Cohn; Editing by Catherine
Evans)
