* Steadier commodities little respite for emerging markets
* Russian shares, rouble fall
* Turkish industrial numbers boost shares but lira slips
* Romanian leu holds ground; central bank support seen
By Sebastian Tong
LONDON, Dec 8 (Reuters) - Steadier commodity prices offered
little respite for emerging markets on Tuesday and failed to
rouse Russia's rouble, which languished at its weakest against
is euro-dollar basket in over 11 weeks.
Turkey's surprisingly strong October industrial production
figures sent its key stock index <> to six-week peaks
while Romania's leu held its ground to the euro despite
heightened political uncertainty following the unexpected
victory of the incumbent in its weekend presidential elections.
Federal Reserve Chairman Ben Bernanke's affirmation on
Monday that the central bank would hold benchmark rates at
exceptionally low levels for "an extended period" provided some
support for risk appetite but his warning that the U.S. economic
recovery still faced "formidable headwinds" sounded a sombre
note amid thin year-end trade. []
Bernanke's caution was echoed by European Central Bank
President Jean-Claude Trichet who said the euro zone economic
recovery would be bumpy. []
Standard & Poor's (S&P) move on Monday to put Greece on
negative credit watch for a likely ratings downgrade also
coloured sentiment. []
"The day started quite nervously but it seems to have
relaxed a little bit. Initially, there was a spillover from the
Asian session," said Beat Siegenthaler, chief strategist
emerging markets at TD Securities.
Emerging shares retreated for the third successive session
but pared earlier losses, slipping 0.5 percent by 1155 GMT while
emerging sovereign debt spreads <11EMJ> traded four basis points
wider at 310 bps over U.S. Treasuries.
Commodity prices, whose weakness sparked off early week
profit-taking, stabilised but Russia's and South Africa's
resource-focused bourses failed to gain any traction.
Russian shares <> were down over one percent to
two-month lows while South African equities <.JTOPI> were lower.
SUSPECTED INTERVENTION
The rand <ZAR=> snapped a four-day losing streak to rise 0.6
percent against the dollar but the rouble fell over one percent
against its currency basket <RUS=MCX>, its weakest level since
mid-September.
"There is much to suggest that the Russian central bank has
picked up direct and unsterilised intervention over recent days,
eyeing U.S. dollar weakness as an opportune time to shake out
speculative long rouble positions," RBS analyst Tim Ash said in
a research note.
Suspected central bank intervention was also seen in Romania
where the leu currency held steady <EURRON=> despite the
weakness of its peers such as the Czech crown <EURCZK=> and
Hungarian forint <EURHUF=> against the euro.
The leu's relative outperformance is all the more stark
given the heightened instability after weekend elections
unexpectedly returned the incumbent President Traian Basescu.
Leftist challengers of the president have alleged fraud and
vowed to contest the result, threatening to extend the political
deadlock that is endangering an IMF-led financial rescue
package. []
"I'm quite surprised by the performance of the leu...I would
imagine the central bank was intervening," said TD Securities'
Siegenthaler.
Meanwhile, Israeli shares <> drifted higher to hit new
1-1/2 year highs while Turkish shares <> up 1.7 percent
after figures showed an unexpected rise in industrial production
in October, the first in 16 months.
The lira, however, remained 0.8 percent weaker against the
dollar <TRY=>.
(Additional reporting by Carolyn Cohn; Editing by Victoria
Main)
