EMERGING MARKETS-Stocks kick off week on strong note; India, Turkey in focus

Emerging market equities kicked off the week on a strong note with Indian stocks scaling their latest record high yet, while investors assessed data that showed inflation in Turkey remained high, upping the pressure for tight monetary policy. India's benchmark Nifty 50 index climbed 0.2% on Monday as investors bet on the south Asian country's strong economic growth.

Emerging market equities kicked off the week on a strong note with Indian stocks scaling their latest record high yet, while investors assessed data that showed inflation in Turkey remained high, upping the pressure for tight monetary policy.

India's benchmark Nifty 50 index climbed 0.2% on Monday as investors bet on the south Asian country's strong economic growth. Ratings agency Moody's sharply raised its 2024 gross domestic product (GDP) forecast for India to 6.8% from 6.1%. Broadly, the MSCI's gauge for developing market equities gained 0.7%, hovering near fresh eight-month highs as traders bought into the previous week's marginal dip.

The currencies index inched up 0.1%, though Turkey's lira dropped to record low levels of 31.425 against the dollar. The country's domestic annual consumer price inflation climbed to 67.07% in February, exceeding expectations of a 65.7% rise as food, restaurant and education prices spiked.

The Turkish currency lost more than 36% last year and the country returned to an orthodox monetary policy, following months of low interest rates and against the backdrop of local elections. Later in the week, traders will keep an eye out for Fitch's credit rating on the country. "We just started to look at Turkey because there could be some opportunities, but again the situation is quite risky where there are a lot of macro challenges," said Andrea Federici, managing director at Silk Invest.

China's blue-chip CSI300 index and Hong Kong's benchmark index ended flat as caution loomed ahead of a highly anticipated annual parliamentary meeting on Tuesday. Investors are expecting the unveiling of moderate stimulus plans to stabilise growth, although a detailed roadmap of bold policies to fix the Chinese economy's deep structural imbalances remains unlikely.

"Internally they need some support from the government like a structural change... no one will come from outside China to help, you need to address these internally to boost confidence," Federici added. Currencies of most central and eastern Europe economies were largely flat against the euro. The Polish zloty will be in focus ahead of a local central bank monetary policy decision where analysts expect interest rates to be left at 5.75%.

On the other hand, South Africa's rand was among top gainers, up 0.6% ahead of fourth-quarter GDP figures due during the week. Israel's shekel strengthened 0.2%. Pakistan's international bonds extended their recent rally after the country's newly formed parliament elected Shehbaz Sharif on Sunday as prime minister for a second time, following weeks of uncertainty after a hung election.