Emerging market stocks were on track to snap a six-session losing run on Friday, while Turkey's lira weakened ahead of a hearing for a detained U.S. pastor which has strained the country's ties with Washington.
Solid gains in Taiwanese, Indian and South Korean shares helped drive MSCI's index of developing world stocks 2.2 per cent higher, after Thursday's 3.2 per cent fall, its biggest daily fall since a bout of market turmoil around Britain's vote to leave the EU two years ago.
Those moves tracked a general improvement in appetite for risk among investors globally, with developed world stock markets recovering after a dramatic two-day slide on Wall Street.
"We're seeing a bit of a rebound in EM stock markets today...we saw a similar occurrence earlier this year when U.S. stocks came under pressure and that automatically improved, and that might be what we're seeing this time around as well," said Jason Tuvey, senior emerging markets economist at Capital Economics.
The index was still on course to end lower for a third straight week and has lost around $1 trillion in value this year as rising U.S. interest rates, a strong dollar and an escalating U.S.-China trade war bear down on sentiment.
Turkey's lira gave up early gains to weaken 0.4 per cent ahead of another hearing in the trial of U.S. pastor Andrew Brunson which has weighed on its ties with the United States. U.S. media reports said his release had been agreed with Ankara but the State Department said it was unaware of any such deal.
A rise in oil prices, surging inflation and concerns over the influence of President Tayyip Erdogan on monetary policy have played into the lira sliding about 36 per cent this year.
"The release of Brunson might provide some short-term respite, even allowing the central bank to refrain from further hiking its policy rates later this month," said Tim Ash, senior EM sovereign strategist at BlueBay Asset Management.
"But unless we see the much better focus and coordination between (Finance Minister Berat) Albayrak's team and those in the advisory team around the president, muddle through will likely fail and still end up with Turkey going to the IMF."
South Africa's rand sailed 1.1 per cent higher and bond yields across two to ten-year maturities dipped ahead of a Moody's rating decision. Markets widely expect the rating agency to keep the rating unchanged and await the mid-term budget to be delivered by new Finance Minister Tito Mboweni on Oct. 26.
(With inputs from agencies.)