* Emerging stocks gain on Ireland, debt spreads flat
* China raises banks' reserve requirements
* Forint hits 8-day high vs euro
By Carolyn Cohn
LONDON, Nov 19 (Reuters) - Emerging stocks hit their highest
in four days on Friday, boosted by signs of an imminent rescue
package for Ireland, while markets largely shrugged off a rise
in China's bank reserve requirements.
Official talks have started in Dublin on a possible bail-out
for Ireland totalling tens of billions of euros, aimed at
stopping the country's banking crisis spreading to other euro
zone countries and beyond.
Emerging Europe has had a relatively muted reaction to
Ireland's problems compared with the impact of Greece's woes
earlier this year. But it could be hit by any longer-term damage
to the euro zone, its main trading partner, and to euro zone
banks.
"We are seeing a kind of stabilisation. The risk environment
is slightly better because of the financial support the EU is
going to provide for Ireland, but risks of a hiccup are still
there," said Murat Toprak, emerging markets strategist at HSBC.
"I would not rush into buying central and eastern European
currencies."
China continued its recent monetary tightening policy,
raising banks' reserve requirements by 50 basis points for the
second time in two weeks, but there was limited immediate change
in emerging markets, with the move coming outside Asian trading
hours. []
"The timing was a bit unexpected but I do not think it will
have a big impact. In terms of direction we are still in the
same process of tightening monetary conditions," said Toprak.
The MSCI emerging equities index <.MSCIEF> rose 0.35 percent
on the day, bringing gains in the past two sessions to 2 percent
and lifting the index from six-week lows hit earlier this week.
The Thomson Reuters emerging Europe index <.TRXFLDEEPU> rose
0.5 percent, while emerging sovereign debt spreads were
unchanged at 245 basis points <11EMJ> over U.S. Treasuries.
The Hungarian forint <EURHUF=> hit its highest against the
euro in over a week on hopes for an Irish deal. Hungary has one
of the highest debt to GDP ratios in eastern Europe, and is seen
as one of the more vulnerable in the region to an escalation of
the debt crisis.
The cost of insuring Hungary's debt against default edged up
1 basis point in the five-year credit default swap market, to
310 bps, according to Markit.
The rand <ZAR=> rose 1 percent after briefly weakening on
Thursday on a largely expected 50 basis point rate cut to record
low levels of 5.5 percent, but bond yields <ZAR157=>.
"The cut was not fully priced in, so bond yields are down
but the general lack of risk aversion is making dollar/rand come
off and we are also seeing more bond inflows which is helping
the rand," said a trader.
Turkish markets were shut for a holiday.
(Additional reporting by Sujata Rao)
