LONDON, Feb 12 (Reuters) - Emerging stocks rose 1 percent on Wednesday to three-week highs, lifted by solid Chinese trade data and the new Federal Reserve boss who testified that there were no plans to speed up the pace of stimulus withdrawal.
Hungarian shares bucked the stronger emerging markets trend on expectations that an EU legal opinion paves the way for local courts to rule against banks on a controversial loans issue.
Behind the broader sentiment boost was data showing China's January exports and imports easily beat forecasts, easing concerns over a slowdown in the world's second-largest economy.
That helped extend the previous session's gains which were fuelled by comments from the new Fed boss Janet Yellen. Yellen was upbeat on the U.S. economy but said she would not make abrupt changes to monetary policy.
Most stock markets rose, with Moscow and Istanbul up 1 percent . Earlier in Asia, the Korean won led currency gains, rising to one-month highs.
Ilan Solot, emerging markets strategist at Brown Brothers Harriman in London said markets were " tired of selling".
Emerging stocks fell 6.6 percent in January and most emerging currencies are in the red against the euro and dollar.
"There has been a significant build-up of short positions and at any sign of improvement you will see a short-covering type of rally," Solot said.
Emerging European currency gains were led by the Hungarian forint which firmed half a percent to the euro.
Solot put the forint's rise - bigger than its neighbours - to the fact that it had fallen more in recent weeks.
"There is a much larger short base in the forint than other Eastern European currencies," he said.
The weak spot was the Budapest stock market which fell almost 1 percent, led by a fall in Hungary's biggest bank, OTP .
The losses come after the European Court of Justice issued a legal opinion that could clear the way for Hungarian courts to rule on whether some aspects of the foreign currency loans that banks issued locally breached the law.
The government has pledged new steps to help households who are burdened with Swiss franc and euro mortgages though its earlier measures saddled the banking sector with big losses.
"It would seem to be a go ahead for Hungarian courts to make a decision on the FX loans issue and what we have seen in the past 4 years is that the Hungarian government has tried to reduce burden on households at the expense of banks," said William Jackson, economist at Capital Economics in London.
"That explains the losses in OTP shares today."
In the former Soviet Union, Kazakhstan's tenge eased a quarter point, a day after the central bank devalued it by 19 percent to the mid-point against the dollar.
The Ukrainian hryvnia fell 1 percent and the rouble eased a touch . Russia's central bank again lowered the corridor in which the currency trades, having shifted it almost 30 times this year.
Further depreciation pressure is likely on the currency which analysts say looks uncompetitively valued against trade partners Russia and Kazakhstan and is weighed down by political turmoil and the suspension of a $15 billion loan from Russia.
"The risk of sharp currency losses is largest in Ukraine, even in an scenario where the authorities return to the deal with Russia," Unicredit analysts told clients.
They also expect the rouble to fall but at a slower pace.
Latin American currency markets were opening weaker with the Brazilian real down 0.3 percent to the dollar, reversing the previous session's gains.
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