CARACAS (Reuters) - Venezuela's ever-theatrical socialist leader Hugo Chavez sought to display his vigor on Thursday by playing sport in his palace grounds after mocking a U.S. media report that he was having emergency treatment.

"I'm fine. Those who don't love me and wish me ill, well bad luck!" a sprightly sounding Chavez said in the latest of his regular dawn calls to state TV.

Wearing a bright red training top and a cap, the 57-year-old later called cameras to the Miraflores presidential palace where he tossed a baseball back and forth with aides.

"This is part of a morbid, rude campaign," Chavez -- who like his mentor Fidel Castro is now the subject of constant conjecture about his well-being -- told reporters at the palace, clutching reports about his supposed health scare.

The Miami-based El Nuevo Herald reported overnight that Chavez had been admitted to a military hospital in Caracas due to kidney failure, related to his ongoing treatment for cancer, that had left him in a dangerous condition.

Chavez has completed four chemotherapy sessions after surgery in Cuba to remove a cancerous tumor earlier this year.

The former soldier says he is now recovering fully and will win a new six-year term at an election in 2012. He accuses his opponents of exploiting his illness for political gain.

"The rumors are part of their strategy, but they are going to founder against reality," Chavez said.

"We must stop the speculation. I ask the Venezuelan people to ignore these rumors. If anything happened, I'd be the first person to tell you about any difficulty. Nothing's happened beyond what's normal in the treatment process."


Information Minister Andres Izarra said it was irresponsible reporters, not his boss, who needed medical treatment. "The ones who should be admitted are the journalists of the Nuevo Herald, but to a madhouse," he said on Twitter.

Chavez has had to drastically cut a famously tough work schedule. Prior to his illness, he would frequently give speeches to the nation for up to six or seven hours, drink dozens of cups of coffee a day, and sleep just a few hours.

The president said he was working "at half-throttle" during his convalescence. He said that while rumors circulated about his health on Wednesday he was being briefed by his foreign minister on the U.N. meeting in New York.

Beyond Chavez, an inner circle of confidants and his doctors, very little is known about the president's precise condition, leading analysts and medical experts to speculate he may be putting a brave face on his treatment.

Chavez had cultivated an image of a robust, sports-loving leader. So while his sickness has given him a small sympathy bounce in opinion polls, it also threatens to dent an aura of invincibility he has built up during 13 years in power.

Venezuelan economist Alejandro Grisanti of Barclays Capital in New York said bondholders and other investors should expect plenty more rumors about Chavez's condition between now and the October 7, 2012 presidential election.

"Investors will need to get used to this type of speculation and the volatility that it may cause in Venezuelan assets, given the scarcity of information regarding Chavez's health status from the government," he said.

The benchmark 2027 sovereign bond has lost more than 11 percent this year, but was bidding up slightly on Thursday at 66.625. The spread of Venezuelan bonds over U.S. Treasuries narrowed by 53 basis points to 649 bps according to JP Morgan's Emerging Market Bonds Index Plus (EMBI+).

Though Venezuela's bonds often move on internal politics and the prospects for Chavez's government, analysts say the global economic crisis remains the overriding driver.

(Additional reporting by Mario Naranjo; Editing by Daniel Wallis)

Source: Reuters US Online Report World News