Emerging Markets-Pakistan unrest, Kenya poll in focus

By Peter Apps

LONDON, Dec 28 (Reuters) - Emerging equities fell on Friday alongside other global markets with investors watching Pakistan after the assassination of opposition leader Benazir Bhutto, and Kenya where election results were coming in.

Emerging currencies were mixed against a broadly weaker dollar, which was undermined by disappointing U.S. durable goods data that boosted hopes of further rate cuts.

Global emerging equities .MSCIEF fell 0.2 percent.

Pakistani markets were closed on Friday with the rupee currency PKR= little traded offshore and last quoted at a new three-year low of 61.30 per dollar.

The Indian rupee fell along with local equity markets on Friday on worries foreign investors would withdraw funds in the aftermath of the killing. It later recouped some losses to trade flat around INR=IN Thursday's close of 39.42/43.

"The Indian stock market and (rupee) may be impacted to some extent in the short term," said Calyon Asia Research in a note.

"We believe that a possible impact on India and the Indian rupee should be manageable. But there is risk that the Pakistan issue significantly pushes up risk aversion and adds to other worries in the global financial markets," the bank added.

Pakistan's five-year credit default swaps spiked to 520 points, some 120 bps wider since Bhutto's death as investors factored in unrest in the nuclear-armed state.