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REFILE-EMERGING MARKETS-Rand drops 2 pct; Turkey steadies after selloff

Friday, 5 Oct 2012 | 7:46 AM ET

(Corrects typo in paragraph 7 to "slumped")

LONDON, Oct 5 (Reuters) - South Africa's rand plunged 2 percent on Friday to just shy of a three-year low against the dollar as labour unrest swept the country, while Turkish assets stabilised after the previous day's sell-off caused by political concerns.

South Africa's economy is under increasing strain from waves of wildcat strikes, which first hit the mining sector and have lately spread to factory workers and truckers.

The rand

has fallen for seven out of eight sessions and is on track for its biggest weekly loss in over a year.

"This is a continuation of the theme we have seen play out for the past week or two ... (but) a lot of bond investors are now hedging their positions, and that is impacting the currency," Manik Narain, a strategist at UBS, said.

South African bonds have been in demand by foreign investors since Citi announced in April they would be included from October in its key WGBI global bond index, but many investors say those flows are starting to taper off.

Johannesburg stocks

rose 1 percent after three days of losses as mining shares benefited from higher commodity prices and the weak rand.

Turkey's lira stabilised

off three-week lows and its stock index gained 1 percent after border tensions with Syria did not escalate.

Turkish assets slumped on Thursday after Turkish artillery retaliated following deadly Syrian attacks on a border village.

In emerging Europe, the forint hit a two-week high, gaining 0.7 percent versus the euro

, after Hungary abandoned a plan to tax central bank transactions, removing a stumbling block in aid talks with international lenders

.

Russia's rouble was flat after the central bank kept key interest rates unchanged at its monthly policy meeting, though it kept a hawkish bias.

Stocks rose 2 percent after a 4 percent jump in Brent crude on Thursday.

Markets were awaiting monthly U.S. jobs data due at 1230 GMT, which might show whether recent indications of a growth pickup in the world's biggest economy are accurate.

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For GRAPHIC on MSCI emerging index performance 2012:

For GRAPHIC on MSCI emerging Europe performance 2012:

For GRAPHIC on MSCI frontier index performance 2012:

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see

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(Reporting by Shadia Nasralla and Sujata Rao; editing by Jane Baird)

((sujata.rao@thomsonreuters.com)(+44 20 7542 6176 sujata.rao.thomsonreuters.com@thomsonreuters.net))

((Emerging Markets Prices from Reuters

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

1008.74 +3.22 +0.32 +10.08

Poland

2388.40 +18.22 +0.77 +11.37

Hungary

19094.24 +34.64 +0.18 +12.49

Romania

4781.05 -0.79 -0.02 +10.24

Russia

1512.68 +29.65 +2.00 +5.47

South Africa

32366.34 +361.04 +1.13 +13.69 Turkey 67567.99 +658.61 +0.98 +31.80 India 18965.39 -92.76 -0.49 +22.71 Currencies Latest Prev Local Local close currency currency % change % change in 2012 Czech Rep 24.87 24.93 +0.26 +2.72 Poland 4.08 4.08 +0.21 +9.54 Hungary 282.81 284.61 +0.64 +11.24 Romania 4.57 4.55 -0.39 -5.41 Serbia 114.83 115.02 +0.17 -6.86 Russia 30.96 30.98 +0.07 +3.99

Kazakhstan

150.27 150.27 +0.00 -1.20 Ukraine 8.14 8.15 +0.12 -1.72

South Africa

8.60 8.51 -1.08 -6.25 Kenya 84.90 84.70 -0.24 +0.06 Israel 3.85 3.86 +0.14 -1.10 Turkey 1.80 1.80 +0.07 +4.90 China 6.28 6.28 +0.00 +0.16 India 51.78 51.74 -0.07 +2.39 Brazil 2.02 2.02 -0.16 -7.81 Mexico 12.76 12.76 -0.01 +9.30 Debt Index Strip Spd Chg %Rtn Index Sov'gn Debt EMBI+ 269 -2 0.00 694.48

Currency percent change calculated from the daily U.S.

close at 2130 GMT.)) Keywords: MARKETS EMERGING

  Price   Change %Change
MSCI
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