EMERGING MARKETS-Stocks fall on China; Egypt rallies MyZA

LONDON, Aug 13 (Reuters) - Egypt's stock market rallied 0.7
percent on Monday after the country appeared to take a decisive
step towards civilian rule, bucking a quarter percent fall in
the broader emerging equity index driven mainly by weakness in
China.
    Islamist President Mohamed Mursi dismissed Cairo's two top
generals and quashed a military order that had curbed the new
leader's powers. Its central bank is also to receive a $2
billion easy-terms loan from oil-rich Qatar to shore up depleted
currency reserves .
    Cairo stocks extended the previous session's 0.2
percent gains. The Egyptian pound, which has been languishing
near seven-year lows, firmed to 10-day highs versus the dollar
 but credit default swaps were unmoved, reflecting broader
caution.
    Emad Mostaque, Middle East strategist at Religare, said that
if the army accepted the dismissals, Egyptian stocks would be "a
huge, huge buy within the next few days, (offering) the most
near-term upside of any global market." 
    In Kuwait, stocks hovered near eight-year lows as a
political crisis weighed on sentiment. 
    MSCI's emerging equity index slipped 0.3 percent, hit by
Shanghai which fell 1.5 percent due to worries over company
earnings. 
    But MSCI's Emerging Europe index .MIEE00000PUS gained 0.2
percent as Russia, its biggest component, jumped 1 percent on
the back of stronger oil prices.
    Hungary's forint fell 0.5 percent versus the euro 
a day ahead of data expected to show the economy contracted in
the second quarter. Two central bankers have suggested interest
rates could be cut later this month.
   

 (Reporting by Sujata Rao; Editing by John Stonestreet)