* U.S. drugmaker Moderna says its vaccine show promise
* EM shares index at 14-day high
* Turkish lira marks longest winning streak since June 2019
* Indonesian rupiah firms after cenbank holds interest rate
By Susan Mathew
May 19 (Reuters) - Emerging market shares rallied strongly on Tuesday and Turkey’s lira looked to mark its ninth straight session of gains among currencies, as hopes of a vaccine for the novel coronavirus added to optimism about a faster economic recovery.
U.S. drugmaker Moderna said overnight its COVID-19 vaccine showed encouraging results in a small group of healthy volunteers in an early stage trial.
This raised hopes of a faster than expected economic recovery with Moderna planning to start a larger late-stage trial in July.
MSCI’s index of emerging market shares rose 1.3% with Asian shares set for their biggest percentage rise in three weeks, while South African shares hit an over 11-week high.
“The peak-virus trade continues to gather momentum after last night’s Moderna headlines, and there is no reason to doubt that will not continue,” said Jeffrey Halley, senior market analyst, Asia Pacific at OANDA.
Chinese blue-chip stocks added 0.8%, after Beijing said it will open more sectors to private firms and reduce direct government interference in microeconomic activities.
Oanda’s Halley cautioned, however, that the vaccine timeline is still long from an economic standpoint, given Moderna itself expects to get results by the end of the year before the vaccine will have to be produced on a large scale and distributed.
“In the best-case scenario, it will probably be another year before normal life will make a comeback. That is a long time... especially if you are unemployed or shortly to be; or a company that is running tight on cash flow in the next few months,” he said.
MSCI’s emerging markets currency index rose for a third session running, as risk appetite saw the dollar rush dwindle.
After opening at its strongest level in two months, Indonesia’s rupiah hit session highs after the central bank kept its key interest rate unchanged against expectations for a cut, to support currency stability.
Turkey’s lira rose 0.3%, set for its longest gaining streak since June last year, with investors eyeing this week’s central bank meeting for details on developments on foreign funding.
Turkish President Tayyip Erdogan announced a nationwide lockdown for four days starting on May 23 to prevent the spread of the virus during the Eid al-Fitr religious holiday.
Russia’s rouble firmed 0.5%, helped by a recovery in oil prices, while South Africa’s rand advanced 0.4%, aided by a recent rally in metals prices.
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For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru, editing by Ed Osmond)