Ukraine crisis slams Russian, other EM assets

  • Russian stocks slide, rouble at 14-month lows
  • Central and eastern European stocks, FX drop sharply
  • Latam stocks set for worst day since November

Jan 24 (Reuters) - Russia's rouble and stocks slid on Monday, and emerging markets across Europe, Middle East, Africa and Latin America dropped sharply as worries that Moscow could invade Ukraine gripped the West.

The rouble , , which began the year at around 74 per greenback, slid almost 2% to 14-month lows and Ukraine's hryvnia moved closer to more than one-year lows, as the European Union readied "never-seen-before" sanctions and the NATO beefed up reinforcements to eastern Europe. read more

Dollar bonds in both countries , extended declines.

The Kremlin accused the West of "hysteria" and has maintained that it had no plans to attack its neighbour. But it has massed about 100,000 troops near Ukraine's borders. Many countries have begun evacuating their diplomats from Kyiv.

"What you see now is the market catching up with changing the implied expectations. ... You are seeing a substantially higher chance of conflict ... and many investors are starting to hedge their positions," Cristian Maggio, head of strategy at TD Securities, said.

"The Eastern European region remains the epicentre of the crisis. Surely you may see emerging markets in general retreat a bit."

The Belarusian rouble dropped 1.4% to hit April lows, while the Polish zloty , Czech crown and the Hungarian forint slid around 0.5% despite a weaker euro. South Africa's rand retreated 1% from over two-month highs.

Among stocks, the Russian benchmark (.IMOEX) hit over one-year lows led by energy majors, while the dollar-denominated RTS index (.IRTS) plummetted as much as 11%.

Those in central and eastern Europe (.WIG), (.BUX), (.BETI) fell between 1.2% and 4.6%. Turkey stocks (.XU100) lost 5%.

Maggio said the increased tensions pose an upside risk to the 50-basis-point hike he predicted from Bank of Russia in February.

The Turkish lira was kept afloat by the Finance Minister's prediction that inflation could rise to some 40% in the coming three months before falling, lower than 50% anticipated by economists for the first half. read more

In Latin America, Brazil's real and Mexico's peso lost 0.8% and 0.7%, respectively. Stocks in the region (.MILA00000PUS) fell 2.9%, tracking its worst day since late November.

Mexico faces risks to economic growth and potential for a credit rating downgrade in the medium term from political developments including the likely passage of a controversial energy bill, JP Morgan said in a report. read more

Washington flagged concerns about the bill on Friday, saying it could impede investment and economic development in North America.

Officials, lawmakers and business leaders say in private they believe the initiative will be watered down, but it is unclear by how much or whether it will be enough to restore bruised investor confidence. read more

Key Latin American stock indexes and currencies at 1437 GMT:

Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru; Editing by Barbara Lewis and Richard Chang

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