LONDON, June 30 (Reuters) - More downgrades of emerging European sovereigns are likely and emerging corporate defaults are likely to continue to rise, Fitch ratings agency said on Tuesday.
The majority of the 22 ratings of emerging European sovereigns, including Iceland, are on negative outlook or Ratings Watch Negative, Fitch said, with none on positive outlook.
This suggests that "further downgrades in the region are likely", Fitch said in its bi-annual sovereign review.
More downgrades are also possible in Asia, where Fitch has South Korea, Mongolia, Sri Lanka, Taiwan and India on negative outlook. In Latin America there are three sovereigns on negative outlook -- Mexico, Jamaica and El Salvador -- and in the Middle East and Africa there are two -- South Africa and Ghana.
Around one third of emerging market corporates and banks with international ratings by Fitch -- around 700 -- are on negative outlook or Ratings Watch Negative, and only 2 percent are on positive outlook.
"Given the very weak economic environment and the reduced availability and higher cost of financing, it is likely that the number of corporate defaults will continue to rise," Fitch said.
Ratings agencies downgraded many emerging sovereigns during the height of the financial crisis last autumn, but the spate of downgrades has largely dried up in the past few months.
Investors continue to be concerned about the prospect of corporate defaults, however, with companies in countries such as Russia facing a large number of interest and principal bond payments next year.
(Reporting by Carolyn Cohn; Editing by Ron Askew)