* Emerging stocks rise after Japan stimulus, Asia rally
* Central, Eastern Europe FX underperform
* Moldova unrest watched for wider impact
By Peter Apps
LONDON, April 9 (Reuters) - Emerging stocks rose on Thursday
towards new year highs set earlier in the week fuelled mainly by
Asian optimism, but Central and Eastern European currencies once
again underperformed.
Political unrest in Moldova had little effect on markets,
but investors watched for wider impact.
Benchmark emerging equities <.MSCIEF> rose 2.5 percent by
1145 GMT, regaining the previous day's losses but still short of
Monday's intraday peak, the highest since October.
They have gained almost a third since early March on hopes
of that the economic crisis is reaching bottom.
Asian stocks had led a global rally on Thursday powered by
technology stocks, with Japan's surprisingly large stimulus
package and stabilising economic activity helping put new energy
under the rally which followed the London G20 meeting.
"There is underlying positive sentiment in markets generally
following the G20 and additional IMF money, particularly
important to emerging markets," said Dresdner Kleinwort emerging
strategist Jon Harrison. "The gains in Asian equities do
reinforce the global picture."
He said results from major international banks in the next
few weeks would be key to sentiment, with a strong risk of a
market pullback from recent gains.
Most emerging bourses in the European time zone were also
up, with Russia <> leading the field by rising 3.48
percent, taking its gains this year to almost 25 percent after
widespread capital flight last year.
Emerging sovereign debt spreads <11EMJ> narrowed three basis
points to 570 over U.S. Treasuries, denoting a marginal rise in
risk appetite.
MOLDOVA WATCHED
The cost of insuring Central and Eastern European sovereign
debt against default in the credit default swaps market fell
slightly even in the three Baltic states, downgraded by credit
ratings agency Fitch on Wednesday.
Latvian credit default swaps narrowed 36 basis points to
802, meaning it would cost $802,000 to protect $10 million of
five-year debt.
Polish <EURPLN=> and Czech currencies <EURCZK=> were both
marginally weaker, down 0.26 and 0.13 percent respectively,
while the Hungarian forint <EURHUF=> oscillated between positive
territory and a fall of some 0.36 percent.
Harrison said there were signs of profit-taking after recent
rallies, and traders also said dealing was likely to be light
and volatile ahead of the Easter break.
Russia's rouble <RUS=MCX>, however, was clearly benefiting
from the more positive global mood, rising 0.47 percent against
the euro-dollar basket.
The Turkish lira <TRY=> was up 0.58 percent and the South
African rand <ZAR=> up 0.48 percent, both in very volatile
trade. Dresdner's Harrison said the South African unit was
supported by Wednesday's announcement that the man expected to
become the country's next president, Jacob Zuma, would not face
corruption charges, seen removing short-term unpredictability.
Markets were also largely ignoring ongoing unrest in
Europe's poorest country Moldova, where protesters briefly
stormed the president's office and an apartment building after
the ruling Communist Party won elections.
Moldova's president accused neighbouring Romania of
interfering to try to overthrow the government, with Russia's
RIA news agency reported on Thursday that Moldova planned to
expel three Romanian journalists. []
Romania's leu <EURRON=> seemed unaffected, up 0.14 percent
against the euro. Fitch warned Moldova's B- rating might be
endangered if political unrest in the country persisted and
impacted the economy. []
"There is perhaps a risk of spill over into Romania," said
Harrison. "But the fact that Romania is in the European Union
will give some protection to the markets there. If Russia
becomes heavily involved, there will be a geopolitical angle...
which could affect global sentiment. Until that happens, the
local story is just the local story."
(Additional reporting by Catherine Bosley; Editing by Jason
Neely)
