* Emerging stocks retreat from year-highs
* Investors question whether G20 true turning point
* South Korea, Gazprom plan dollar bond issues
* Emerging currencies weaken on renewed risk aversion
By Catherine Bosley
LONDON, Apr 7 (Reuters) - Emerging stocks retreated on
Tuesday from year highs as investors tried to assess if last
week's G20 summit represented a true turning point, while South
Korea and Russia's Gazprom moved to issue Eurobonds.
Emerging stocks had rallied for five straight days boosted
by the G20 meeting, which boosted funding for the International
Monetary Fund (IMF) to help the tackle crises in emerging
economies. They are now up more than 30 percent since the
beginning of March.
The benchmark equities index <.MSCIEF> fell 1.04 percent to
616.55 by 1032 GMT. It surged above 629 on Monday, its highest
since October.
"It's a bit of a backlash from the improvement in risk
appetite that we have seen last week," said Benoit Anne, foreign
exchange and debt strategist at Merrill Lynch. "The market is
really trying to digest whether we have reached a breakthrough
with the G20. Our bias is to think... we are not out of the
woods "
Hungary's main share index <> led regional falls,
dropping 2.06 percent. Equities in Prague <> fell 1.57
percent while Polish stocks <> were trading 1.50 percent
lower and Russian stocks <> fell 0.98 percent.
Emerging sovereign debt spreads <11EMJ> widened eight basis
points to 576 over US Treasuries, a sign of slightly heightened
risk aversion.
Renewed appetite for at least more perceived creditworthy
emerging sovereign and quasi-sovereign borrowers has prompted
several countries to brave the Eurobond market in recent weeks,
most recently Abu Dhabi and Qatar, with Croatia saying it would
follow suit.
SOUTH KOREA, GAZPROM
Sources said South Korea would aim to raise $2 billion in
its first dollar-denominated debt sale since 2006, as a need for
dollars sparked a return to foreign markets after an aborted
sale last year. []
Russia's gas export monopoly Gazprom <GAZP.MM> -- which last
week placed the country's first Swiss franc Eurobond since the
global financial crisis -- plans to start marketing a benchmark
sized dollar-denominated Eurobond issue and expects to price it
next week, banking sources said [].
Emerging currencies were also weaker across the board,
undermined by the global pullback although some said they
believed the recent rally -- which had taken several to
multi-month highs -- still had more steam in it.
"We assume that the improved sentiment created by the summit
is not just a temporary phenomenon even though it is obvious
that not all difficulties have been overcome yet," Commerzbank
said in a research note.
The Polish zloty <EURPLN=> led regional currency losses,
falling 1.13 percent a day after European Central Bank Governing
Council member Ewald Nowotny said emerging European states
should not unilaterally adopt the euro, contradicting a report
that the IMF had raised the possibility. []
Also on Monday, Poland said it might be interested in
tapping a newly formed IMF flexible credit line programme, but
did not need to do so for the time being.
The Hungarian forint <EURHUF=> was down 1.04 percent after
data showed Hungarian industrial output in February plunged
nearly 30 percent year-on-year, worse than expected and building
on falls in the previous month. []
The Czech crown <EURCZK=> was 0.16 percent weaker, as
investors cautiously eyed a deal to install a non-partisan
government led by the head of the state statistics office until
elections are held later this year. []
The Turkish lira <TRY=> dropped 1.31 percent, sinking from
Monday's three-month high against the dollar on hopes Turkey
would soon agree on a IMF deal. South Africa's rand <ZAR=> fell
1.07 percent against the dollar, having surged to near 5-1/2
month high on Monday on greater risk appetite.
(Editing by Peter Apps and Andy Bruce)
