* Emerging stocks hit 2-mth low after U.S. jobs
* Hungary assets down on IMF aid delay fears
* Spreading Syria crisis hits Turkish assets
* Rand falls 0.5 pct towards 10-week lows
By Carolyn Cohn
LONDON, April 10 (Reuters) - Emerging stocks dropped to a
two-month low on Tuesday and Turkish and Hungarian debt
insurance costs hit six-week highs as most markets played
catch-up following Friday's weak U.S. jobs data, which dented
demand for riskier assets.
As investors returned after Easter holidays, emerging
markets sold off on the March slowdown in U.S. job growth to
120,000, well below expectations and the smallest increase since
October.
Risk appetite was also subdued on expectations that Chinese
first-quarter growth data due at the end of this week will
signal the economy grew at its slowest pace in nearly three
years, according to a Reuters poll.
"The price action in risky assets has been negative for the
past couple of weeks and it continues to appear a little bit
negative now," said Luis Costa, emerging markets strategist at
Citi.
"The Chinese GDP number on Friday is adding to the caution
here and then the beginning of the earnings season in the U.S."
The MSCI emerging equities index dipped 0.27
percent to a two-month low and the Thomson Reuters emerging
Europe index also fell 0.27 percent to a 2-1/2
week low.
Emerging market currencies were generally softer, with the
rand falling 0.5 percent towards recent 10-week lows,
though emerging sovereign debt spreads narrowed by 2
basis points to 336 bps over U.S. Treasuries.
The cost of insuring Hungary's debt against default rose 16
basis points to six-week highs of 567 bps in the five-year
credit default swap market, according to Markit. The country's
stock market hit its lowest point in nearly three months.
Concern that Hungary will fail to agree an aid deal with the
International Monetary Fund has put pressure on Hungarian assets
this year.
The IMF said last week there were no formal negotiations
with Hungary yet and a local newspaper said the talks were
unlikely to begin in April.
Turkish CDS also hit a six-week high, at 243 bps and up 7
bps from Monday's close, and Turkish stocks hit a
four-week low.
Geopolitics are a mounting potential risk for Turkey, after
Syrian troops shelled villages, fired across frontiers and were
accused of massacres in the hours before a ceasefire deadline
that many doubt can usher in a U.N.-brokered settlement to a
brutal conflict.
"Turkey has again demonstrated its importance in the region,
with PM Erdogan standing as a credible mediator between all
sides," said Simon Quijano-Evans, chief EEMEA economist at ING,
in a client note.
"This brings risks with it, as seen in yesterday's incidents
from across the border in Syria."
Czech stocks fell to six-week lows and the crown
hit an eight-day low before trimming losses.
Czech Prime Minister Petr Necas has given his junior
coalition partner until Tuesday to agree budget measures to keep
cutting the deficit next year or face a government collapse in
the worst row in almost two years in power.
(Additional reporting by Clare Kane; Editing by John
Stonestreet)
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