EMERGING MARKETS-Debt worries weigh on Hungary, emerging stocks
* Hungarian forint lowest in nearly 3 mths, stocks fall
* China's yuan slips after band widens, stocks steady
* Russian stocks fall 1 pct, led by Sberbank
By Carolyn Cohn
LONDON, April 16 (Reuters) - Hungary's forint hit its lowest in nearly three months on Monday on renewed worries about the country's chances of getting international aid, with concern about the euro zone crisis keeping all emerging assets depressed.
Spats between indebted Hungary and the European Commission have delayed the start of aid talks with the European Union and the International Monetary Fund.
Hungarian Prime Minister Viktor Orban last week resisted the EU setting political preconditions for starting aid talks, saying it would amount to "blackmail".
Rising euro zone peripheral bond yields have encouraged a sell-off in riskier emerging market assets, and Hungary is one of the most vulnerable in emerging Europe.
"There are renewed fears about the future of the IMF programme in Hungary ... after the government raised objections to the conditions attached to the IMF programme," said Neil Shearing, chief emerging markets economist at Capital Economics.
"In an environment of weaker risk appetite, Hungary always comes under the spotlight."
Hungarian stocks dropped 0.7 percent to three-month lows and the forint fell to the key 300/euro level.
Hungarian debt insurance costs rose 11 basis points to 2-1/2 month highs of 575 bps in the five-year credit default swap market, according to Markit.
The MSCI emerging equities index fell 0.6 percent and the Thomson Reuters emerging Europe index dropped 0.45 percent, as Spanish 10-year bond yields rose above 6 percent for the first time this year.
The yuan slipped, though Chinese stocks were steady, after China at the weekend doubled the size of its trading band against the dollar in a further liberalisation of its financial markets.
But the currency remained within the old boundaries of 0.5 percent either side of its midpoint.
"The wider trading band should not be seen a signal of faster CNY appreciation but a signal of further relaxation of capital controls and a move towards currency convertibility," said Societe Generale analysts in a client note.
The rand dropped 0.5 percent, as South African Finance Minister Pravin Gordhan said he was concerned about the currency's volatility.
Russian stocks dropped nearly 1 percent to five-day lows, hit by a sell-off in shares of top lender Sberbank ahead of the expected sale of a government stake in the bank.
Emerging sovereign debt spreads were steady at 337 basis points over U.S. Treasuries. (Additional reporting by Sujata Rao; Editing by Janet Lawrence)
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