Emerging Markets-Stocks tumble but Polish zloty at new high

                                
 * Emerging equities near 20-week lows on global sell-off
                                
 * Polish zloty firms to new high
                                
 * Slovak crown softens after euro conversion rate fix
                                
 
                                
 By Sebastian Tong
                                
 LONDON, July 8 (Reuters) - Emerging assets were sold off as
risk aversion once again seized global markets but the Polish
zloty hovered at record highs, bolstered by investor
expectations of robust economic growth and rising interest
rates.
                                
 The Slovak crown softened along with its peers after the
European Union finance ministers set the rate at which it would
be replaced by the euro.
                                
 World stocks skidded to a 21-month low hit by fresh credit
fears following a Lehman Bros report that a pending accounting
change could force U.S. mortgage lenders Fannie Mae and Freddie
Mac to raise a combined $75 billion in capital.
                                
 At 1104 GMT, the benchmark emerging equities index <.MSCIEF>
slid 1.66 percent to 1,021.02,its lowest level in nearly 20
weeks while emerging sovereign debt spreads <11EMJ> were flat at
304 basis points over U.S. Treasuries.
                                
 "The mood is negative and the investors are nervous.
Liquidity is thin so it won't take much for prices to fall,"
said Lars Christensen, Copenhagen-based senior analyst at Danske
Bank.
                                
 Local currencies, which have advanced of late amid
expectations that policymakers would hike interest rates to curb
inflationary pressures, were mostly weaker.
                                
 The Czech crown <EURCZK>, which earlier hit a record high of
23,445 against the euro, was down 0.61 percent to 23.6.
                                
 The unit came under pressure after data showed that consumer
prices had grown at half the predicted pace in June, lowering
chances of an interest rate hike next month. [ID:nL07157455]
                                
 Comments by the Czech central bank vice-governor that the
exceptional strength of the crown would cut domestic demand and
slash inflation below the central bank's target also helped ease
interest rate expectations. [ID:nL08263976]
                                
 The Polish zloty was one of the few currency gainers,
firming 0.11 percent against the euro <EURPLN=> to 3.3010.
                                
 The unit earlier touched an all-time high of 3.2987.
                                
 "There is no stopping in the euro/zloty downside trend, now
facing the next psychological support at 3.30. We believe that
the rise in the zloty is not over as yet and expect a further
rally towards levels last seen against the German mark at 3.16
and beyond," said BNP Paribas in a research note.
 The Slovak crown <EURSKK=>, which has risen 11 percent
against the euro since the start of the year, dipped 0.17
percent to trade at 30.23 against the single currency after the
country cleared the final hurdle towards joining the euro zone
on Jan. 1, 2009.
                                
 Earlier in the day, EU ministers set the final euro
conversion rate for the crown at 30.12. [ID:nL08735954]
                                
 The downturn in global risk appetite meant that even the
Kenya's shilling currency <KES=> failed to benefit from an
anticipated resolution of a political crisis gripping the
country's fragile coalition government.
                                
 News that the Kenyan finance minister has offered to step
aside during an investigation into alleged corruption failed to
rouse the unit which slipped 0.96 percent against the dollar.
[ID:nL08454023]
  (Reporting by Sebastian Tong; Editing by Victoria Main)