LONDON, March 6 (Reuters) - Emerging market stocks rose to two-week highs on Wednesday, lifted by gains in China and fresh signs of a U.S. economic uptick, which spurred Wall Street to a record close the previous day.
The Kenyan shilling fell 1 percent on concerns about a delay in issuing the results of a closely fought presidential election, while investors were also watching for any fallout in the Venezuelan market from the death of President Hugo Chavez.
The main emerging markets index rose 0.6 percent to move back into positive territory for the year.
Chinese stocks, the biggest component in the emerging index, rose for a second day, benefiting from policy announcements by China's parliament.
"China confirmed plans to widen its budget deficit, boosting hopes for improved economic performance this year," Credit Agricole analysts said in a note, referring to China's plans for record public spending in 2013.
On Tuesday, data showing a pickup in the U.S. service sector pushed the Dow Jones Industrial Average to a record close, while European stocks hit 4-1/2 year highs on Wednesday.
The Kenyan shilling, which rallied to November 2012 highs after Monday elections passed relatively smoothly, fell back on concerns that delays in announcing the result could prompt rivals to challenge the outcome.
Post-election violence in 2008 killed over 1,200 people.
Political instability was also feared in Venezuela after the death on Tuesday of Chavez, who ruled the country for 14 years. Venezuelan bonds, which have been among the best performing emerging dollar assets this year with gains of over 4 percent, were little changed. Yield spreads over Treasuries tightened 4 basis points to 731 bps.
The 2027 bond fell 0.370 cents on the dollar, while credit default swaps were little changed around 639 bps, according to Markit, well off multi-year lows hit in January.
In central Europe, the Hungarian forint slipped 0.57 percent to 299.36 per euro, close to five-week lows hit on Tuesday. The currency, facing a key technical barrier before it breaches 300 per euro, is being rattled by uncertainty over the course of monetary policy under the central bank's new governor.
The zloty slipped 0.10 percent before a central bank meeting, which is expected to result in a cut in interest rates of 25 basis points.