* Emerging equities lower on global economic worries
* Halt in fighting helps rouble, Russian stocks still down
* Central European currencies weaker across board
By Peter Apps
LONDON, August 13 (Reuters) - A halt in fighting between
Russia and Georgia brought no relief to emerging equities on
Wednesday, with renewed concern about the global economy driving
them down to their lowest in a year.
Benchmark emerging equities <.MSCIEF> were down 0.68 percent
by 0945 GMT, having hit their lowest level since August 20 in
Asian trade, at 975.37.
Russia's rouble recovered against its dollar/euro basket on
the end to the heavy fighting between Russian and Georgian
troops that had seen the Russian currency slump.
But Russian equities <> were down 0.14 percent, with
investors still unnerved by the speed with which the unexpected
conflict broke out and with sentiment further soured by a slight
fall in oil prices.
"With the rouble, there has been recovery on the end of
fighting," said Dresdner Kleinwort foreign exchange strategist
Jon Harrison. "But there is clearly still nervousness in Russian
equities.
Foreign investors in particular have also been unnerved by
Prime Minister Vladimir Putin's attack on the pricing strategy
of the country's leading coal firm as well as the battle for
control of BP's local joint venture. This has helped push
Russian stocks down 21 percent this year.
Global emerging equities were down by a similar amount, with
investors increasingly concerned that U.S. economic problems are
percolating through to other emerging economies.
"We never believed in decoupling," said Harrison. "There was
always going to be a knock-on effect. What people are
concentrating on now is peaking inflation and slowing growth."
CENTRAL EUROPE TREND CHANGES
Central European currencies were broadly weaker on
Wednesday, with analysts increasingly calling an end to a recent
rally which has seen most gain around 10 percent or more against
the euro since the start of the year.
The Czech Republic cut interest rates last week and other
regional economies are also seen coming to the end of a
tightening cycle that had made them particularly appealing to
investors.
The Czech crown <EURCZK=> lost 0.44 percent against the
euro, while the Polish zloty <EURPLN=> lost 0.31 percent and the
Hungarian forint <EURHUF=> lost 0.32 percent.
Strategist see the dollar extending its rebound from record
lows against the euro and other currencies, but it was slightly
lower on Wednesday morning with both South Africa's rand <ZAR=>
and the Turkish lira <TRY=> up 0.10 and 0.25 percent up against
the greenback respectively.
Emerging sovereign debt spreads <11EMJ> were one basis point
wide at 294 above U.S. Treasuries.
The 2012 bonds in Bank of Georgia recovered almost 5 basis
points on a possible end to the conflict but remained 700 basis
points over the sovereign curve.
"(They) do seem cheap but further negative actions by the
rating agencies cannot yet be fully discarded," said Commerzbank
debt strategist Luis Costa.
Ratings agencies Fitch and Standard & Poor's both downgraded
Georgia after the outbreak of fighting and warned on Tuesday
that the end of combat operations would not prompt an immediate
reversal, warning of long-term economic impacts [].
