September 26, 2019 / 9:20 AM / 18 days ago

EMERGING MARKETS-Renewed Sino-U.S. trade optimism lifts stocks; FX tepid

* Barring China, EM shares gain on trade hopes

* Auto stocks lift Turkish shares on cheaper loans

* Hungary c.bank trims inflation forecast for 2019, 2020

By Agamoni Ghosh

Sept 26 (Reuters) - Emerging market shares climbed on Thursday after Beijing confirmed it was in talks with Washington to resolve their nearly 15-month tariff dispute, reviving optimism for a quick resolution to the Sino-U.S. trade spat.

China’s comments came in a day after U.S. President Donald Trump said a trade deal with Beijing could happen sooner than expected.

MSCI’s index tracking developing world stocks rose 0.35 to come off three-week lows hit in the previous session, while emerging market currencies were tepid.

“EM currencies seem to be agnostic to those developments, but the equity markets are on a much better footing,” said Cristian Maggio, said head of EM strategy at TD Securities.

“It seems we are heading in a slightly more constructive direction with trade, but we have had some false starts in the past which could happen again.”

Most stock indices gained barring mainland China shares , which closed 0.8% lower, before Beijing commented on its trade negotiations and as caution prevailed ahead of a week-long holiday.

Hong Kong’s Hang Seng closed 0.3% higher after leader Carrie Lam said she would hold her first talks with the public in a bid to resolve a political crisis that has fuelled nearly four months of violent protests and plunged the city into chaos.

Johannesburg stocks advanced 0.7%, while those in Moscow moved 0.3% higher.

Currencies in the developing world witnessed a rather lukewarm response to trade-related developments, with the trade-exposed Chinese yuan and South Korean won mostly flat.

Russia’s rouble weakened marginally as demand for the local currency eased with monthly tax payments coming to an end, and as oil prices declined on increasing signs of slowing demand. Turkey’s lira moved 0.2% lower, but stocks rose buoyed by automakers after three state banks announced that they would provide lower interest rates on loans to purchase locally produced cars.

In emerging Europe, Hungary’s forint recouped from an all-time low, while the National Bank of Hungary trimmed their key inflation forecasts for 2019 and 2020.

For GRAPHIC on emerging market FX performance 2019, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2019, see tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Agamoni Ghosh, Editing by Sherry Jacob-Phillips)

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