* Emerging stocks up 0.8 percent extend gains after US GDP
* Rouble shines; other high-yield FX gains fizzle out
* Croatia $1.5 bln bond rises; book size was $3 bln
By Sujata Rao
LONDON, Oct 30 (Reuters) - Emerging stocks extended gains on
Friday following a bounce fuelled by good news on the U.S.
economy though investors' apparent reluctance to add positions
will see the sector end the week with losses of over 4 percent.
Emerging currencies gave up early gains though the South
African rand -- one of the hardest hit by this week's shakeout
-- firmed almost one percent against the dollar.
The dollar which fell in the wake of Thursday news the U.S.
economy had finally emerged from its worst recession since the
Great Depression [] edged back up as concerns
resurfaced about the withdrawal the fiscal and monetary stimulus
measures put in place earlier this year.
The MSCI emerging stocks index <.MSCIEF> rose 0.8 percent
after closing Thursday with similar gains.
"Markets are consolidating after vigorous moves and the good
rally we saw after the U.S. GDP but I don't think anyone will
want to put on risk on Friday," said Shahin Vallee, emerging
markets strategist at BNP Paribas in London.
All eyes are now on the U.S. Federal Reserve meeting next
week, with central banks also due to meet in the euro zone and
Britain. In emerging markets the Romania and the Czech central
banks will hold meetings.
"The FOMC next week will be key...if they take a more
aggressive stance (on withdrawal measures) that would be
positive for the dollar and disruptive for EM assets," Vallee
added.
ROUBLE, LEU SHINE
Central European currencies slipped, with the zloty and
forint down about 0.3 percent to the euro <EURPLN=> <EURHUF=>.
The Czech crown fell almost 0.8 percent, just off recent 5-month
lows <EURCZK=> hit after talk of rate cuts by central bankers.
"It's all about the euro-dollar today, if that goes up or
down, regional currencies follow," one trader said.
There were some which bucked the trend.
Romania's leu firmed about half a percent to the euro
<EURRON=> with dealers in Bucharest citing central bank
intervention that lifted the currency off 8-1/2 month lows.
The currency has been pressured by political turmoil and
fears for the fate of an IMF loan tranche if Romania fails to
meet the lender's terms for a 20-billion euro package.
Turkish markets which were closed on Thursday saw stocks up
1.5 percent <> but the lira's initial half percent gains
to the dollar <TRY=> fizzled as the greenback strengthened.
The rouble continued to shine, shrugging off a half percent
interest rate cut on Thursday to rise almost half a percent
against its euro/dollar basket <RUS=MCX>.
Russia's central bank twice shifted the levels at which it
intervenes to buy foreign currency and has now allowed the unit
to appreciate 8 percent in the past two months.
Bonds also rose, with the EMBI Plus index <11EMJ> seeing the
yield spread to U.S. Treasuries down 4 basis points to 315 bps.
Local bonds, which rose sharply the day before, for the most
part extended gains, with some of the biggest moves coming in
South Africa where yields had backed up almost 30 basis points
this week on expectations of increased supply in coming years.
The benchmark rand bond <ZAR157=> saw yields down to 8.4
percent, 6.5 bps down on the day.
A trader said Croatia's $1.5 billion 10-year bond issued
late Thursday had also risen -- issued at 98.16 percent of
principal, it has risen to trade around par.
Originally expected between $500 million and $1 billion,
Croatia received orders of $3 billion, sources said.
(Reporting by Sujata Rao; Editing by Victoria Main)
