* Emerging shares rise 0.6 percent; Moscow outperforms
* Hungarian forint up again
* Emerging sovereign bond yields tighten 10 bps
By Duncan Miriri
LONDON, Dec 7 (Reuters) - Emerging stocks rallied for the
fifth straight session on Tuesday, while the Hungarian forint
recovered some of the previous session's losses against the euro
ahead of a parliamentary vote on its 2011 budget targets.
Overall, the mood was one of wait-and-see ahead of the Irish
budget, due to start at 1545 GMT, the passage of which is a
precondition for the country to access emergency loans from the
European Union and the International Monetary Fund.
That rescue package is key for calming market worries about
debt in the euro zone, the topic that has weighed on markets in
recent weeks. However, risk appetite is being supported by
expectations of prolonged U.S. monetary easing.
"Not a lot of direction at present and I think people are
waiting to see what happens in Ireland with the Irish budget
debate this afternoon," said Nigel Rendell, emerging markets
strategist at the Royal Bank of Canada in London.
Emerging stocks, as measured by the MSCI index <.MSCIEF>
added 0.6 percent to a 3-1/2 week high, with Russian markets
<> the top performer, gaining 1.2 percent. Polish <>,
Hungarian <> and South African <.JTOPI> markets also rallied
around 1 percent.
The European Union has, as widely expected, given the nod to
Russia to join the World Trade Organisation in 2011, a move that
is seen as extremely positive for its stocks, analysts said.
Moscow is already one of the top performing emerging equity
markets of 2010, with gains of almost 20 percent, thanks to a
successful soccer World Cup bid and Pepsico's <PEP.N> $5.8
billion aquisition of Russian food maker Wimm-Bill-Dann.
The Hungarian forint <EURHUF=> rose 0.3 percent against the
euro, as some traders saw the Monday sell-off that followed
Moody's two-notch ratings downgrade as a buying opportunity.
Hungarian yields are higher than most emerging markets, with
interest rates having risen last week to 5.25 percent.
The government pressed forward with its 2011 draft budget
despite market doubts it had overestimated economic potential
and was being too aggressive in its attempts to boost state
revenues. []
The cost of insuring Hungarian debt against default for five
years slid to 366 bps from 375 bps, while that of insuring
Polish debt for a similar period fell to 143 bps from 148 bps.
The Romanian leu <UERRON=> inched up against the euro,
gaining 0.16 percent after the coalition government approved a
cost-cutting budget for next year, a move that should allow
Bucharest to keep its IMF-led aid package on track.
"Our view on the currency remains bearish, however,
particularly as the budget still needs to be ratified after the
government tackles the problem of the unitary wage law, and the
Dec. 14 vote of confidence remains a major risk event," BNP
Paribas said in a research note.
The South African rand <ZAR=> gave up early gains against
the dollar, consolidating after hitting 3-1/2-week highs in the
previous session
The sovereign debt index for emerging markets narrowed by 11
basis points versus U.S. Treasuries <11EMJ> <11EML>.
(Editing by Catherine Evans)
