* Periphery euro zone debt woes spark profit-taking
* Czech stocks down; gold lifts South Africa shares
* Hungarian shares rebound but forint pressured
By Maria Golovnina
LONDON, Nov 11 (Reuters) - Worries about euro zone sovereign
debt kept emerging markets on edge on Thursday, with Hungary's
forint falling sharply and regional equities trading at their
lowest levels in weeks.
Trading volumes are low as the United States marks a
national holiday but investors are watching closely for any
signs of contagion from Ireland and Portugal.
Debt risk premiums for Ireland, Portugal and Spain hit
record highs as they struggled to convince investors that their
budget-slashing deficit plans would work. []
Fears are mounting that the Irish government could have to
resort to a Greek-style bailout to help cope with the worst
budget deficit in Europe. []
"Until last week, emerging market investors were willing to
ignore the problems in the periphery of the euro zone but now
they are getting nervous and that has triggered profit-taking,"
said Lars Christensen of Danske Bank.
"The worry now is that the Irish situation could become
systemic. For central and eastern Europe, this is more about
risk sentiment than actual contagion as there are few direct
transmission links between Ireland and the region."
By 1145 GMT, the benchmark MSCI emerging equities index
<.MSCIEF> was down 0.4 percent while emerging sovereign debt was
unchanged to trade 241 bps over U.S. Treasuries <11EMJ>.
The Thomson Reuters emerging Europe index <.TRXFLDEEPU> was
0.4 percent down.
Czech stocks <> hit 2-1/2 week lows, falling 0.9 percent
while Romanian shares <> languished at their lowest levels
in nine weeks.
Buoyant gold <XAU=> prices kept South African stock prices
aloft, nudging the key index <.JTOPI> 0.3 percent higher.
Polish markets were closed for a holiday.
HUNGARY'S CREDIBILITY
Hungarian stocks <> rose as much as 1 percent in a
rebound following their steepest daily fall on Wednesday since
late May when the government confirmed plans to keep windfall
taxes on certain sectors of the economy in place beyond an
initial deadline of 2012.
"There is little one can say about yesterday's events in
Hungary except for that they pulled the country one major step
down the credibility ladder," said Cheuvreux in a client note.
The forint <EURHUF=> fell 0.8 percent to three-week lows
against the euro after Prime Minister Viktor Orban said the
controversial tax regime should be continued until 2014.
[]
The cost of insuring Hungarian sovereign debt against
default for five years rose 6 bps to 312 bps, according to
Markit.
Meanwhile, the Polish zloty <EURPLN=> edged up to 3.91 per
euro, slightly off the six-month highs reached in the previous
session.
Bucking the broadly weaker trading tone in emerging
currencies, the rouble <RUS=MCX> rose for a fifth straight day
against its dollar-euro basket, bolstered by firmer oil prices
<CLc1>, to trade at its highest level in 2-1/2 weeks.
(Additional reporting by Michel Rose and Sebastian Tong,
editing by Giles Elgood)
