EMERGING MARKETS-Stocks just off 6-mth highs; oil worries weigh
* Stocks stall near 6-mth highs as oil price weighs on sentiment
* Oil benefits Russia; stocks jump almost 4 pct, rouble up 1.5 pct
* Turkey hit as oil imports to exacerbate current account gap
By Sujata Rao
LONDON, Feb 24 (Reuters) - Emerging equities rose on Friday but failed to regain recent six-month highs, held back by concern that soaring oil prices will hurt the fragile world economy, while oil-exporter Russia's stocks rose and the rouble hit a 5-1/2 month high.
Brent crude futures have surged 11 percent this month as countries scrabble to source oil supplies from producers other than Iran, which is facing Western sanctions over its nuclear programme. Oil hit nine-month highs of almost $124 per barrel.
That is putting a dampener on the optimism generated by this week's aid deal for Greece, strong growth indicators from Germany and the liquidity injection expected next week from the European Central Bank as part of its long-term financing plan.
"The sharp moves we saw in January have to a large extent lost momentum. While the EM outlook has improved due to reduced risk of contagion from the euro zone banks, a correction is due and oil prices are a key potential trigger for that," said Mats Olausson, head of emerging markets research at SEB in Stockholm.
By 1220 GMT, emerging stocks rose 0.6 percent, on track for the second straight week of gains and having risen around 4.5 percent this month. However, reflecting the oil price concerns, share markets in oil importers India and South Korea booked their first weekly losses in eight weeks.
Emerging European stocks jumped 2.1 percent, thanks to Russia, which constitutes half the index.
Russian stocks, also playing catch-up after a market holiday on Thursday, jumped 4.3 percent, their biggest one-day rise since end-November. The index, 60 percent weighted to energy, benefits strongly from higher oil prices.
The rouble also firmed to the highest since early September, rising more than 1 percent against the dollar. The currency and the stock market have fully recovered the losses of last December, despite looming March 4 presidential elections that Prime Minister Vladimir Putin is expected to comfortably win.
Olausson said oil prices were the main factor though recent strong economic data along with hopes for economic reforms after the election were also supportive.
"With abundant liquidity and high oil prices, political risk has receded to the backburner, it's playing second fiddle to market sentiment at the moment," he said.
The flipside of the story is Turkey, which imports all its energy needs and is struggling with a record current account deficit. High oil prices will also hit efforts to curb inflation which is in double digits.
Turkish stocks rose just 0.2 percent, underperforming broader emerging equities, and the lira slipped 0.12 percent and bond yields inched higher.
"A $10 rise in oil prices creates an additional cost of $4 billion in Turkey's current account gap. So in two weeks the current account bill rose by $6 billion, which explains the lira's negative performance," Fatih Keresteci, a strategist at HSBC Istanbul, told clients in a note.
Societe Generale said it was time to take profit on long lira positions, adding: "We think that tactically a more neutral stance on lira is more appropriate in view of the threat of higher oil prices."
Currencies in emerging Europe were generally firmer thanks to the euro's gains against the dollar. The Czech crown, Polish zloty and Hungarian forint firmed around 0.2 percent versus the euro.
The zloty clocked a two-week high, boosted also by an 800 million euro share sale the previous session.
The forint edged back towards five-month highs hit this month, but investors are waiting for news on its hoped-for aid deal from the International Monetary Fund and European Union. That deal will also determine whether Hungarian interest rates can fall.
"The current levels are about as strong as the forint can get for now until some sort of a breakthrough comes," a currency trader in Budapest said.
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