Worries about escalating price pressures have resurfaced in recent days, with investors taking stock as data showed inflation surging to 32-month highs in China and accelerating in India.
"It's a trade-off these days between risk aversion and risk appetite," said Zsolt Papp, emerging markets specialist at Union Bancaire Privee in Zurich.
Papp said the long-term outlook for emerging markets remained positive as long as data from the U.S. did not disappoint.
"The swing element comes from developed markets.
Now everyone is looking at the U.S. numbers and the reporting season has kicked off, so if we get any negative surprises there, the question will arise again about how much risk people are prepared to take on."
Concerns about the euro zone resurfaced as Moody's cut Ireland's rating and data showed region-wide inflation expanding more than expected in March, adding to the case for more rate rises.
Investors trickled back to emerging markets for the third week in a row, albeit at a slower rate, with equity funds receiving $2 billion in inflows compared with $5.7 billion the previous week, banks said, citing data from EPFR.
MSCI's benchmark emerging equities index slipped 0.2 percent and was poised for its biggest weekly fall in a month.
The Thomson Reuters emerging Europe index dipped 0.1 percent.
Stocks were mixed across the board, with equities in Budapest putting in gains of more than 1 percent while Bucharest's bourse fell 0.6 percent.
CBANK CONTINUITY
Turkey named Erdem Basci as the new central bank governor late on Thursday.
The lira dipped 0.1 percent, as investors expected the appointment to cause little change to the country's current policy stance.
"Today's step has removed uncertainty and presented the market with a new governor who is widely known and respected by market participants.
Investors are likely to appreciate this," said Christian Keller, analyst at Barclays Capital.
Basci is regarded as the architect of Turkey's unorthodox monetary policy, introduced last December, combining lower interest rates, despite strong growth, with higher reserve requirements for banks, to slow rampant loan expansion and ensure overall tightening.
The majority of analysts polled by Reuters expect the central bank to hold interest rates at 6.25 percent and maintain required reserve ratios at current levels when the monetary policy council meets next week.
Shares in Istanbul gained 0.4 percent, while the yield on the new Feb 20, 2013 benchmark bond stood at 8.70 percent after rising to 8.72 percent on Thursday from 8.68 percent a day earlier.
Currencies in central and eastern Europe traded flat, the zloty halted its recent rally after Poland's top central banker played down expectations of a quick rate hike.
The rouble stabilised against the dollar after four days of declines, propped up by exporters switching foreign currencies for roubles to meet an April 15 tax deadline.
Nigeria's 2012 dollar bond was steady ahead of presidential elections due to take place on Saturday.
A victory for incumbent Good luck Jonathan would boost investor confidence and could lead to further gains for the bond, which has also been buoyed by high oil prices.
Overall emerging sovereign bonds were trading at a yield premium of 260 basis points over U.S Treasuries one bp tighter on the previous day.