* Stocks rise 0.3 percent; Russia gains 0.6 pct on oil
* Most E.Europe PMIs flat; currency gains fizzle out
* Turkey assets flat as GDP data signals soft landing
LONDON, April 2 (Reuters) - Emerging shares rose on Monday,
underpinned by strong Chinese factory data, though a strong
early rally fizzled after equivalent numbers in the euro zone
painted a dismal picture.
Russian stocks led gains, boosted by a buoyant oil price.
The MSCI emerging stocks index, which chalked up
its best first quarter since 1992, rose 0.3 percent,
outperforming global indices after factory activity and exports
across Asia strengthened in March.
China's Purchasing Managers' Index (PMI) hit an 11-month
high last month, easing fears of a sharp slowdown in the world's
No. 2 economy and boosting prices for growth-sensitive oil and
copper. .
The oil gains helped Moscow's stock market rise 1.2
percent at one point but the gains soon fizzled and by 0930 GMT
the index was up around 0.6 percent. Stocks gains in Poland and
Hungary also faded after rising half a percent .
Sentiment was dampened somewhat by signs China's economy
likely experienced its weakest quarter since 2009 while PMI data
from the euro zone manufacturing slowed there for the eighth
month in a row, with Germany seeing a downturn for the first
time since December.
In emerging Europe, with the exception of Hungary, where
manufacturing unexpectedly picked up, regional PMIs in Poland,
Russia and Turkey were essentially flat, hovering just over the
50 mark that marks the balance between expansion and contraction
"On balance, today's data underlines the story that we are
moving away from the dire scenarios towards stabilisation and an
eventual pick-up and that should remain the main message for the
next 6 months," said Simon Quijano-Evans, chief EEMEA economist
at ING Bank in London.
CURRENCIES PRESSURED
The PMI figures took their toll on emerging currencies, with
the Polish zloty trimming almost half a percent gains versus the
euro. The forint jumped almost half a percent
after unexpectedly strong Hungarian manufacturing
sentiment but later traded flat to the euro.
"The biggest challenge for these currencies will be the low
levels of euro/dollar volatility and general expectation for the
dollar to rise versus the euro which is creating a difficult
environment for these currencies," Quijano-Evans said.
Investors in the region will focus on a Polish central bank
meeting this week which will almost certainly leave rates on
hold. Some analysts said however the stagnant PMI could force
the central bank to revisit its hawkish stance.
BNP Paribas said the weak Polish number was likely driven by
anaemic domestic demand.
"This may imply that the stark outperformance of Polish GDP
growth will be gradually fading over the course of the year, in
line with softer consumption and investment growth," the bank's
central and eastern Europe economist Michal Dybula wrote.
"Given the slowdown in growth, tightening of monetary policy
should not be needed."
Turkish stocks and the lira were little changed after
data showed the economy slowed in the last quarter of 2011 and
appeared on track for a soft landing.
(Editing by John Stonestreet)
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