LONDON Aug 21 (Reuters) - Emerging stocks and several central European currencies rose on Tuesday on optimism the European Central Bank will intervene to curb peripheral debt yields, though the Romanian leu fell after a court decision likely to prolong political uncertainty. The European Central Bank poured cold water on a report over the weekend that it was considering capping inflamed borrowing costs by buying struggling euro zone countries' bonds if they breached a certain level. Nevertheless hopes for intervention remain high. The fortunes of emerging European markets are closely linked to those of the crisis-hit euro zone, though these markets have also attracted flows diverted from the currency bloc. "Euro-based EM currencies have enjoyed a happy summer," said SocGen analysts in a client note. "It strongly looks as if ... (they) have benefited from the diversification from western European investments." The Hungarian forint rose half a percent against the euro towards recent 11-month highs and the Czech crown hit its highest since early May. Emerging stocks rose 0.7 percent, with Russian stocks jumping more than 2 percent, helped by higher oil prices. Emerging sovereign debt spreads were trading at five-month lows. The Romanian leu fell 0.2 percent after Romania's Constitutional Court invalidated a referendum to impeach suspended President Traian Basescu on Tuesday, a decision that would return him to office and could prolong his power struggle with prime minister Victor Ponta. Romanian debt insurance costs, however, were trading at their lowest in more than three months in the five-year credit default swap market, according to Markit. Markets in Turkey, Nigeria and the Gulf were closed for holidays on Tuesday.

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