EMERGING MARKETS-Brexit, Fed and China jitters rattle emerging markets

* EM shares down 1.7 pct in biggest fall since Feb
    * China shares slip over 3 percent after fragile data
    * Zloty, Forint volatility futures spike on Brexit jitters
    * Rouble slides as oil drops back to $50 a barrel

    By Marc Jones
    LONDON, June 13 Emerging market stocks saw their
biggest fall since February on Monday as anxiety grew ahead of a
referendum on Britain's potential exit from the European Union
and a U.S. Federal Reserve policy meeting.
    Data pointing to a slowdown in China's economy and a break
back to $50 a barrel for oil added to the pressures, with MSCI's
benchmark EM index declining 1.7 percent to take its
losses over the last three sessions to over 4 percent.
    Brexit jitters found traction in eastern Europe as Polish
zloty  and Hungarian  
forint volatility forwards surged to their highest in a year and
six months respectively.
    Poland has especially close links to the UK with more than
850,000 of its citizens living in Britain and a net inflow of
20,000-30,000 going there each year.
    Eastern European exports to Britain as percentage of GDP are
also significant. The Czech Republic is most exposed at around
4.6 percent of GDP, followed by Poland at around 3 percent and
Hungary at around 2 percent, according to Morgan Stanley.
    "There is increasing concern about Brexit as the (June
23)vote gets closer and the market is now in a risk-off mode,"
said TD Securities head of emerging markets strategy Cristian
    Concerns about a slowdown in China's giant economy were
fanned by data showing the growth in fixed-asset investment
slipped below 10 percent for the first time since 2000 and
investment by private firms slowed to a record low. 
    Chinese stocks closed down over 3 percent, their biggest
tumble since February, as investment in real estate also
posted its first year-on-year slowdown in growth since December,
though property sales by area surged 32 percent. 
    "These leading indicators seem to be telling us that the
Chinese economy won't be as strong this quarter and going
forward," UBS economist Manik Narain said.
    China does not want a trade war with Europe, Premier Li
Keqiang said on Monday at a news briefing alongside German
Chancellor Angela Merkel, who called for more talks with Beijing
on its market economy status under the World Trade Organization.
    China watchers are also gearing for a decision on Tuesday by
equity index provider MSCI on whether to add domestically-listed
Chinese stocks, also known as A-shares, to its EM
    It already includes Chinese shares listed in other parts of
the world and the addition of A-shares would be a symbolic step.
    "We haven't really seen any ability of Chinese stocks to
rally ahead of the MSCI decision," said Narain, who expects MSCI
to start by adding around 5 percent of A-shares from next June,
before building the amount up over a number of years.
    "China's share (of EM index) could grow from 25-26 percent
now to around 40 percent," he said.
    Elsewhere, Russia's rouble fell for its third day
running as oil prices broke below $50 a barrel. 
    Emerging Asian currencies also lost ground against the
safe-haven yen as the Japanese currency touched a three-year
high against both the euro and sterling on Brexit nerves and
ahead of meetings of both the Bank of Japan and Fed this week.
    For GRAPHIC on emerging market FX performance 2016, see link.reuters.com/jus35t
    For GRAPHIC on MSCI emerging index performance 2016, see link.reuters.com/weh36s
    For GRAPHIC on MSCI emerging Europe performance 2016, see link.reuters.com/jun28s
    For GRAPHIC on MSCI frontier index performance 2016, see link.reuters.com/zyh97s
    For CENTRAL EUROPE market report, see 
    For TURKISH market report, see 
    For RUSSIAN market report, see )
 Emerging Markets Prices from Reuters            
 Equities                  Latest    Net Chg  % Chg  % Chg      
                                                     on year    
 Morgan Stanley               
 Emrg Mkt Indx    809.18   -14.64   -1.78   +1.89     
 Czech Rep            819.44   -20.61   -2.45  -14.31     
 Poland           1757.26   -24.76   -1.39   -5.48     
 Hungary           26097.28  -422.33   -1.59   +9.10     
 Romania           6365.94   -44.40   -0.69   -9.11     
 Greece              601.70   -16.97   -2.74   -4.70     
 Russia             924.65   -26.21   -2.76  +22.14     
 South Africa   46540.98  -487.10   -1.04   +1.62     
 Turkey          75473.74 -1413.55   -1.84   +5.22     
 China             2832.51   -94.65   -3.23  -19.97     
 India           26384.71  -251.04   -0.94   +1.02     
 Currencies              Latest    Prev    Local    Local       
                                   close   currency currency    
                                           % change % change    
                                                    in 2016     
 Czech Rep      27.01     27.02   +0.02    -0.04      
 Poland          4.39      4.37   -0.41    -3.05      
 Hungary       312.30    312.03   -0.09    +0.75      
 Romania         4.51      4.51   +0.01    +0.12      
 Serbia        123.30    123.11   -0.15    -1.48      
 Russia            65.58     65.24   -0.52   +11.24      
 Kazakhstan       335.41    335.06   -0.10    +1.52      
 Ukraine           24.95     24.98   +0.12    -4.00      
 South Africa      15.22     15.23   +0.05    +1.60      
 Kenya            101.05    101.10   +0.05    +1.14      
 Israel             3.87      3.85   -0.44    +0.54      
 Turkey             2.93      2.93   +0.05    -0.28      
 China              6.59      6.56   -0.42    -1.43      
 India             67.18     66.94   -0.35    -1.46      
 Brazil             3.42      3.42   +0.02   +15.88      
 Mexico            18.74     18.62   -0.61    -8.36      
 Debt                 Index   Strip Spd  Chg   %Rtn   Index     
 Sov'gn Debt  EMBIG   419         1    .03  7 29.22 1   
 All data taken from Reuters at #N/A The record could not be
found GMT.            
 Currency percent change calculated from the daily U.S.         
 close at 2130 GMT.            

 (Editing by Mark Heinrich)

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