By Sujata Rao
LONDON, Sept 4 (Reuters) - Central bank action lifted some emerging market currencies off lows on Wednesday but higher U.S. yields and the likelihood of military action against Syria kept the sector under pressure.
Emerging stock markets were flat after Tuesday's U.S. manufacturing data supported the view that the Federal Reserve would start rolling back stimulus at its mid-September policy meeting.
That has boosted U.S. 10-year yields by almost 10 basis points since the start of the week and, as the IMF stressed in a paper for this week's Group of 20 summit, holds substantial risks for the developing economies who have profited from the flood of dollars over the past year.
Limited U.S. strikes to punish Syrian President Bashar al-Assad for his suspected use of chemical weapons against civilians are also looking likely and a resulting oil price spike would be an added headwind for energy importers such as Turkey and India
"We are going to deal with geopolitical risk in the oil price in the next few quarters - disruption in Iraq, Libya, the story in Egypt," said Luis Costa, head of CEEMEA FX and debt strategy at U.S. bank Citi.
"It's great news for the few oil exporters like Russia and Nigeria, not fantastic news for the big energy importers, which are also experiencing some depreciation pressures."
The Indian rupee staged a rebound however, rising 0.7 percent after suspected heavy dollar selling by the central bank. That prevented it from hitting a new record low after data showed India's services sector shrinking in August to a four-year low
Dealers cited heavy intervention via state-run banks just before new central bank governor Raghuram Rajan, a former IMF chief economist, takes office.
Indonesia's central bank was also spotted providing dollar liquidity to selected lenders, keeping the currency's losses to around 0.4 percent, while the Turkish lira rose 0.13 percent as the central bank said it could provide dollars out of its gross hard currency reserves if required.
The rouble gained 0.2 percent after Russia's central bank head on Tuesday sent a warning about future inflation that cooled some expectations of a cut in interest rates next week.
Derivatives markets point to more currency weakness ahead. Rupee six-month forward priced the currency at 70.8 per dollar, versus the spot price of 67.2. Rupiah six-month forwards weakened almost 1 percent to 12,330 per dollar, versus the spot rate of 11,100 .
On the Turkish lira, one-month risk reversals show increased demands for dollar calls, or bets the greenback will rise. Analysts say that is unsurprising, given interest rates look unlikely to rise.
"They seem very, very reluctant to raise rates, even in a situation with the lira going thru 2.4, 2.5 against the basket," Standard Bank analyst Tim Ash said.
"So the mix now is basically fixed or anchored policy rates, and willingess to live with a weaker currency."
The rand got some respite, firming 0.3 percent to the dollar after gold miners offered to moderate wage demands to limit the duration of a strike which is estimated to cost South Africa $35 million a day in lost output
On bond markets, South Korea was getting ready to launch a 10-year dollar bond for $1 billion which it hopes to price at 135 basis points above U.S. Treasuries. Kenya said it was in the processs of appointing advisors to lead a bond issue of up to $2 billion.
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see )