EMERGING MARKETS-Stocks drift lower; Pakistan markets rattled by election uncertainty

* Pakistan dollar bonds drop on election uncertainty * China markets closed for week-long holiday * Hungary inflation hits three-year low * EM stocks set for marginal weekly gains By Amruta Khandekar Feb 9 (Reuters) - Emerging market stocks edged lower on Friday while currencies were muted in a quiet session with many markets shut for a holiday, while assets in Pakistan were pummelled by uncertainty over the outcome of the general election.

* Pakistan dollar bonds drop on election uncertainty

* China markets closed for week-long holiday

* Hungary inflation hits three-year low

* EM stocks set for marginal weekly gains

By Amruta Khandekar Feb 9 (Reuters) -

Emerging market stocks edged lower on Friday while currencies were muted in a quiet session with many markets shut for a holiday, while assets in Pakistan were pummelled by uncertainty over the outcome of the general election. Pakistan's sovereign dollar bonds fell more than 5 cents, Tradeweb data showed on Friday, as both Imran Khan and Nawaz Sharif claimed victory in neck-and-neck results from Thursday's elections in the debt-laden nation.

Analysts predict there may be no clear winner in the election, which could make seeking a new bailout programme from the International Monetary Fund (IMF) difficult. "Consensus expectations were of a PMLN (Pakistan Muslim League) victory, an alignment of military and civilian forces, and a smooth negotiation of the next IMF programme," said Hasnain Malik, head of equity research at Tellimer.

"That may still be an outcome but not without a mix of horse-trading, floor-crossing, legal challenges, and protests." Pakistan's benchmark stock index dropped 1.6% following five straight sessions of gains.

A broader gauge of EM stocks slipped 0.2% by 0953 GMT but was on track for third straight weekly gains, propped up by optimism around policy support measures from China. Chinese markets were closed for the week-long Lunar New Year holiday after logging their best week in over a year on Thursday. Hong Kong's Hang Seng shed 0.8%, dragged by property shares in a holiday-shortened session.

South Korean financial markets were also shut. MSCI's index for EM currencies was flat against the greenback.

The index was down 0.2% for the week after two straight weeks of gains, while the dollar was headed for its fourth week in the green as traders dialled back expectations of early interest rate cuts from the U.S. Federal Reserve. The South African rand and Turkish lira drifted 0.3% lower against the dollar each, and the Israeli shekel firmed 0.3%.

Turkey's Treasury said on Friday it had raised $3 billion via a 10-year bond issue on the international capital markets, with a coupon rate of 7.625%. Elsewhere, the Hungarian forint weakened slightly against the euro after inflation in January slowed to a three-year low.

HIGHLIGHTS ** Pakistan 2025 bond drops 4.2 cents on the dollar - Tradeweb

** China new bank loans in Jan hit record high ** India 10-year bond yield rises to 7.115%

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