* Stocks up tracking wider global markets
* European growth worries undermine central Europe FX
* South Africa, Turkey rate decisions awaited
* Ukraine assets seem vulnerable in Russia row
By Peter Apps
LONDON, August 14 (Reuters) - Emerging equities rose on
Thursday tracking wider global markets while worries over
European growth undercut emerging European currencies and the
cost of insuring Ukraine's debt rose on a row with Russia.
Markets were also looking ahead to rate decisions in South
Africa and Turkey later in the day, with no change expected in
either.
Benchmark emerging equities <.MSCIEF> were 0.75 percent
stronger by 1000 GMT, rising off a new year low set on Wednesday
and following wider worldwide stocks which were boosted by
commodities producers.
Central European currencies were broadly weaker on Thursday,
continuing to suffer from concerns economic problems in more
developed European economies would impact what had until recent
days been some of the best performing emerging sovereigns.
"Certainly, there has been a change of sentiment towards
them," said TD Securities strategist Beat Siegenthaler. "We
have seen these currencies weaken in the last few days."
The euro zone economy shrank quarter-on-quarter between
April and June for the first time since measurements for the
single currency began in 1995, the European Union statistics
office said on Thursday, led by the three biggest economies
Germany, Italy and France [].
The Czech crown <EURCZK=> was down 0.99%, while the Polish
zloty <EURPLN=> lost 0.39 percent, both under performing a
weaker euro. Hungary's forint <EURHUF=> was up 0.04 percent.
The South African rand <ZAR=> was up 0.38 percent ahead of
its rate decision, while the Turkish lira <TRY=> was up 0.03
percent.
Russian equities <> were up 2.12 percent, continuing
their recovery after the halt in serious fighting between
Georgian and Russian forces that had hammered Moscow's markets.
But Russian stock markets remain almost 21 percent down so
far this year, also undermined by worries over in investment
security raised by a battle for control of BP's local
joint-venture and government criticism of foreign-listed mining
firm Mechel <MTL.N>.
Mechel was attacked by Prime Minister Vladimir Putin over
its pricing policy and on Thursday Russia's Anti-Monopoly
Service said it might face a fine for abusing its market
position.
Mechel shares rose 13.4 percent overnight in New York after
a Wednesday report the anti-monopoly service would ask it to cut
coking coal prices and pay a fine, seen as a relatively light
punishment compared to that suffered by other victims of Putin's
wrath such as oil giant YUKOS [].
The largely unexpected Georgia conflict has left investors
looking more nervously at other former Soviet states that might
be vulnerable to Russian action, particularly if relations with
the West continued to worsen.
Ukraine introduced tougher regulations on the movements of
Russian warships from its ports on Wednesday in what Russia said
was "another blow" to already difficult relations
[].
Citi said the news resulted in a surge in the cost of
insuring Ukraine's debt in the credit default swaps market, with
the five-year CDS up nearly 5 percent on Wednesday to close at
just over 411 basis points.
"We believe this move has hastened the rise of uncertainty
surrounding the outlook for Ukraine and thus reinforces the
risks to its asset prices," Citi said in a research note.
