EMERGING MARKETS-Turkish assets slump on geo-political tensions

LONDON, Oct 4 (Reuters) - Turkish stocks fell 1.6 percent on Thursday and credit default swaps jumped after a sharp escalation in political risks caused by retaliatory military raids within the Syrian border.

Turkish markets bucked slight gains in broader emerging markets, extending losses after Turkish artillery killed several Syrian soldiers in response to a deadly mortar attack on Wednesday, and the government said "aggressive action" against its territory by Syria's military was a serious threat to its security.

It sought parliamentary approval for the deployment of Turkish troops beyond its borders.

The Istanbul stock market

fell to its lowest since the end of August on Thursday, after shedding 1 percent on Wednesday. The lira hit a three-week low against the dollar

.

The cost of insuring Turkish debt against default rose 7 basis points, Markit said, while benchmark bond yields hit a one-month high

.

"Clearly a short-term risk for Turkey and Turkish assets," said Simon Quijano-Evans, chief EEMEA economist at ING.

MSCI emerging stocks rose 0.3 percent

after fairly robust U.S. data and before a European Central Bank meeting. In South Africa, the rand hit a one-month low as strikes spread from the mining to the manufacturing sector.

South African stocks, however, gained 0.2 percent

and bond yields eased on monetary easing bets.

"The main issue is to secure growth in order to bring down the very high youth unemployment rate and at the same time it's placing pressure on the central bank to cut rates," Quijano-Evans said.

Earlier, India's rupee rose 0.8 percent to five-month highs against the dollar

on broader emerging market gains and expectations the government will announce further reforms.

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For GRAPHIC on MSCI emerging index performance 2012, see

For GRAPHIC on MSCI emerging Europe performance 2012, see

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For CENTRAL EUROPE market report, see

For TURKISH market report, see

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(Reporting by Shadia Nasralla and Sujata Rao; Editing by Susan Fenton)

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((Emerging Markets Prices from Reuters

Equities Latest Net Chg % Chg % Chg on year Morgan Stanley Emrg Mkt Indx

1003.60 +1.10 +0.11 +9.52

Poland

2377.51 -11.27 -0.47 +10.87

Hungary 18932.29 +4.64 +0.02 +11.54 Romania

4750.78 +27.71 +0.59 +9.54

Russia

1478.09 -14.21 -0.95 +3.06

South Africa

31925.74 +57.31 +0.18 +12.14 Turkey 65828.10 -994.26 -1.49 +28.40 India 19058.01 +188.32 +1.00 +23.31 Currencies Latest Prev Local Local close currency currency % change % change in 2012 Czech Rep 25.00 25.03 +0.12 +2.17 Poland 4.09 4.08 -0.16 +9.15 Hungary 285.37 286.50 +0.40 +10.24 Romania 4.54 4.53 -0.15 -4.83 Serbia 115.03 115.06 +0.03 -7.02 Russia 31.11 31.15 +0.14 +3.50

Kazakhstan

150.28 150.19 -0.06 -1.21 Ukraine 8.15 8.15 +0.00 -1.88

South Africa

8.48 8.43 -0.66 -4.95 Kenya 84.90 84.90 +0.00 +0.06 Israel 3.88 3.89 +0.26 -1.72 Turkey 1.81 1.80 -0.23 +4.24 China 6.28 6.28 +0.00 +0.16 India 51.83 52.23 +0.77 +2.28 Brazil 2.02 2.02 -0.10 -7.94 Mexico 12.80 12.82 +0.15 +8.97 Debt Index Strip Spd Chg %Rtn Index Sov'gn Debt EMBI+ 274 -1 -0.16 693.80

Currency percent change calculated from the daily U.S.

close at 2130 GMT.)) Keywords: MARKETS EMERGING