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EMERGING MARKETS-Rouble falls on Ukraine, Dubai stocks bounce from 5-month low

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LONDON, July 1 (Reuters) - The rouble fell nearly 1 percent to its lowest in a week and Russian stocks dropped on Tuesday after a ceasefire ended in Ukraine, while Dubai stocks bounced from five-month lows as investors stepped in to buy cheaper stocks.

Central European markets came under pressure from weaker than expected manufacturing data.

Ukraine's president Petro Poroshenko said he would renew offensive operations against pro-Russian rebels in eastern Ukraine on Tuesday, following the end of a ceasefire.

"Where we go from here is really going to be dependent on (Russian President) Putin's reaction," said Ishitaa Sharma, emerging markets strategist at Citi.

"Obviously offshore (investors) are worried."

The rouble fell to its lowest in over a week and Russia's dollar-denominated stocks also fell nearly 1 percent to their lowest in nearly two weeks.

The MSCI emerging equities index was steady after posting a 4.75 percent gain in the first half, compared with a 5 percent gain in developed markets.

Frontier stocks, meanwhile, have soared 16.5 percent this year, as ultra-low yields in the developed world encouraged switches to higher-yielding assets.

Dubai stocks fell more than 5 percent to four-month lows before trimming losses to stand 1.1 percent down on the day, though builder Arabtec once more hit its 10 percent daily limit down.

The cost of insuring Dubai's sovereign debt against default rose 7 basis points in the five-year credit default swap market to 153 bps, according to Markit, its highest level in nearly two months.

Dubai stocks are in bear market territory, having fallen more than 20 percent in the past month, since the United Arab Emirates, along with Qatar, got an upgrade to emerging market status in the MSCI indexes. That well-flagged move had drawn money into the markets in the past year.

But stock markets in Dubai, Abu Dhabi and Qatar bounced on Tuesday.

"After the declines in Dubai and Qatar, there are a lot of names that look remarkably attractive from the valuation perspective," said Amer Khan, senior executive at Shuaa Asset Management in Dubai.

The forint approached the previous session's two-month lows against the euro and Czech stocks hit five-week lows after weak PMI data.

Hungary's PMI dropped to 51.5 points in June from 53.8 in May and the Czech index fell to 54.7 from 57.3, although both remained above the 50 line denoting growth in activity.

"We still believe growth (in central Europe) remains mixed and it's still shy of an outright boom," said Sharma.

The lira was trading at 2-1/2 week highs as the ruling AK Party named Tayyip Erdogan its candidate for the August presidential election.

In Argentina, 5-year credit default swaps fell 19 bps to 1,710 bps as the country entered a grace period for paying interest on its restructured debt.

Argentina late on Monday said it would send a delegation to New York to meet on July 7 with court-appointed mediator Daniel Pollack, saying it was willing to negotiate in its long-running debt battle with "hold-out" investors.

"If they manage to reach an agreement with the holdout investors, that brings this whole saga to an end," said Viktor Szabo, emerging debt fund manager at Aberdeen Asset Management, adding he had been increasing exposure to Argentina.

For GRAPHIC on emerging market FX performance 2014, see http://link.reuters.com/jus35t

For GRAPHIC on MSCI emerging index performance 2014, see http://link.reuters.com/weh36s

For GRAPHIC on MSCI emerging Europe performance 2014, see http://link.reuters.com/jun28s

For GRAPHIC on MSCI frontier index performance 2014, see http://link.reuters.com/zyh97s

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see )

(Additional reporting by Chris Vellacott and Marc Jones; Editing by Foo Yun Chee)