* Egypt worries diminish for now, CDS prices fall back
* Emerging European currencies track euro higher
* Ivory Coast misses coupon on 2032 bond, price falls
By Isabel Coles
LONDON,Feb 1 (Reuters) - Emerging stocks and currencies
edged up on Tuesday, as optimism about the health of the world
economy offset concerns about political unrest in Egypt and
emerging European currencies benefitted from a strong euro.
Worries that Egypt's troubles would spill over into the
wider Middle East and North Africa region had dampened investor
appetite for risky assets, knocking around 2 percent off
emerging equities in just three days.
"There have been a lot of fears in the last few days about
spillover from the MENA countries, that has calmed down to a
certain extent," said Simon Quijano-Evans, EME economist at
Cheuvreux in Vienna.
The MSCI emerging equities index <.MSCIEF> gained 0.5
percent, re-tracing part of a straight three-session drop,
following upbeat U.S. data in the previous session.
Emerging European stocks added around 1 percent
<.TRXFLDEEPU> and the region's currencies, which tend to track
the euro, were lifted by a jump in euro zone inflation in
January which sent the single currency close to a two-month high
against the dollar.
"On the FX side, the turnaround in euro/dollar is supportive
of the currencies in the (EMEA) region," Quijano-Evans said.
Poland's zloty <EURPLN=> was 0.4 percent stronger, while the
Hungarian forint <EURHUF=> traded just off a three-month high.
The forint has rallied in the run-up to the unveiling of a
fiscal reform package due later this month, but analysts said
the rise may be beginning to look overdone.
"Although being bullish on Hungary is rapidly becoming a
fashionable trade idea, we still see non-resident real money
positioning as very light and also agree that the credit market
has seriously lagged the squeeze in Hungarian government bonds,"
said UniCredit analysts in a note.
Strong manufacturing survey results in Hungary, Poland and
the Czech Republic -- where the January purchasing managers'
index (PMI) hit a record high -- also supported emerging
European assets.
In Turkey, stocks were up 1.4 percent <> and the lira
was nearly 1 percent stronger <TRY=>, after the country's
manufacturing sector grew in January at its fastest pace since
data was first published in 2005.
SURPLUS
South African stocks <.JTOPI> rose 1 percent and the rand
<ZAR=> pulled back from multi-month lows, firming 1.3 percent on
news South Africa posted a trade surplus last year for the first
time since 2003. Analysts, however, were cautious about the
data, noting that exports as well as imports fell in December.
"Such strong signs of an intensified weakness of domestic
demand build a strong case for further monetary stimulus.
Therefore, we believe this makes the news a surprisingly
negative development for the rand," said ING in a note.
Analysts at BNP Paribas agreed the rand's short-term
prospects were poor, citing the likely unwinding of a trade
based on high commodity prices, due to tighter monetary policy
in China and the underperformance of gold prices versus oil.
Russian equities <> were up 0.8 percent in the wake of
the central bank's surprise decision on Monday to leave interest
rates unchanged, hiking reserve requirements instead in a bid to
support economic growth whilst containing inflation.
Ivory Coast's $2.3 billion bond due 2032 fell 3 points to 33
cents on the dollar <XS0496488395=R>, after the West African
cocoa producer, in the throes of a political crisis, failed to
make a coupon payment on the bond.
In debt markets, emerging sovereign debt spreads <11EMJ>
were six basis points tighter at 265 basis points over U.S.
Treasuries, after widening sharply in the previous session.
Debt insurance costs across the Middle East and North Africa
steadied a little, having surged since angry Egyptians took to
the streets calling for the overthrow of the government.
Five-year credit default swaps (CDS) for Egypt were 24 basis
points tighter at 412 bps and Israeli CDS narrowed 3 bps to 143
bps, according to Markit.
Egyptian stocks traded offshore <0#.EGGDR> also retraced
losses.
However, Tunisian CDS were 5 basis points wider at 220 bps
and Lebanese CDS widened by 9 points to 390 bps.
(Additional reporting by Carolyn Cohn; editing by Patrick
Graham)
