Propelled by the euro zone's recovery, Europe's emerging markets are rising above the storm that has hit other developing economies.

Stock markets in Central and Eastern Europe are up 1.2% in the past three months, compared with a 7.5% drop in emerging markets overall, according to index provider MSCI. These markets have risen 2.3% when Russian companies, which have been hard hit by falling commodity prices, are excluded.

Currencies such as Poland's zloty and the Bulgarian lev also are up against the dollar since May, while India's rupee and Turkey's lira have slid to record lows.

Faced with losses in some Asian and South American emerging markets, money managers are scooping up assets such as the Hungarian forint and Czech bank stocks. They are betting that Western Europe's return to growth after a year-and-a-half-long recession will fuel demand for cars, appliances and other goods manufactured in Eastern Europe.

'Central and Eastern Europe has become a relative safe haven within emerging markets,' said Javier Corominas, head of economic research and currencystrategy at Record Currency Management Ltd., which manages about $36 billion. Record Currency Management bought Hungarian forint and Polish zloty in the second quarter, Mr. Corominas said.

Mr. Corominas pointed to Hungary's current-account surplus, in which exports outpace imports, as a reason to buy the forint. Many of the hardest hit countries in the emerging-market selloff, including Turkey and India, run big trade deficits and rely on foreign investment to cover the gap. With the Federal Reserve preparing to wind down policies that flooded financial markets with cheap cash, investors are questioning how those countries will pay for imports and finance debt.

To be sure, even though the euro zone appears to be coming out of its longest recession since World War II, growth both in the region and right outside it remains slow and unemployment high. The Organization for Economic Cooperation and Development expects Poland's economy to expand by just 0.9% this year.

Central and Eastern Europe's economy may not be healthy enough to keep investors from fleeing, particularly if the Fed tightens monetary policy. The possibility of another flare-up in the euro zone's debt crisis could also destabilize emerging markets in the region.

'We would prefer to play Europe from the other side of the Continent, from the U.K. and Norway,' said Paul Christopher, chief international strategist at Wells Fargo Advisor, which has $1.3 trillion under management. 'Emerging markets in general are vulnerable...to what the Fed does.'

Still, exports are bolstering Europe's emerging markets. Hungary ran a trade surplus of 3.68 billion euros ($4.92 billion) in the first half, according to the country's statistics agency, compared with a 3.62 billion euros surplus in the year-ago period. Poland reported a surplus of 574 million euros in June, compared with a deficit of 1.09 billion euros a year earlier, according to the Polish central bank. As countries such as France and Germany import more goods, their emerging-market neighbors will see their trade balance tilt even more in their favor, analysts said.

Kjetil Birkeland, senior analyst at Standish, a subsidiary of the Bank of New York Mellon Corp., said his fund, which manages $15 billion in emerging-market debt, bought Polish zloty in the past six months. Mr. Birkeland said he expects the zloty to get a lift as Germany buys more Polish goods.

Data released on Monday showed Poland's retail sales for July rose 4.3% from the same month last year, surpassing expectations for 2.8% growth, while unemployment eased to 13.1%. The Czech economy recovered from an 18-month recession when its gross domestic product expanded 0.7% in April to June from the previous quarter.

Morgan Harting, portfolio manager at AllianceBernstein LP, which manages $444 billion, this year boosted the fund manager's exposure to Czech banks, which would generate more business as the economy expands. 'You think about the Czech Republic economy improving as its neighborhood gets better,' Mr. Harting said.

Central and Eastern European share prices also are low relative to corporate profits, creating opportunities for bargain hunters, investors said. Stocks are down 34% from their 2011 peak, according to MSCI.

Since early May, investors have put about a net $230 million into funds that mainly buy Polish stocks, according to data provider EPFR Global. In comparison, investors pulled a combined $930 million from stocks in Europe, the Middle East and Africa in the same period.