EMERGING MARKETS-Poland's zloty lags CEE peers on dull manufacturing data, Hong Kong leads stocks' higher

The Polish zloty weakened on Tuesday, after the Eastern European economy's manufacturing activity contracted again last month, while a rally in Hong Kong equities lifted the emerging market stocks index. The zloty eased 0.3% against the euro, snapping a three-day gaining streak, as a survey showed muted demand last month, both domestically and from Western Europe, ate into production.

The Polish zloty weakened on Tuesday, after the Eastern European economy's manufacturing activity contracted again last month, while a rally in Hong Kong equities lifted the emerging market stocks index.

The zloty eased 0.3% against the euro, snapping a three-day gaining streak, as a survey showed muted demand last month, both domestically and from Western Europe, ate into production. S&P Global's Polish manufacturing Purchasing Managers' Index (PMI) inched up to 48 in March from 47.9 in February, but stayed below the 50 mark that separates growth from contraction for the 23rd month in a row.

The Czech crown edged slightly higher after data showed the country's manufacturing decline slowed further in March. Hungary's forint was little changed against the euro after data showed its seasonally-adjusted PMI came in at 52.3 in March, unchanged from a revised February reading.

"The manufacturing PMIs rose across Central and Eastern Europe (CEE) in March but they remain consistent with a relatively weak recovery," Nicholas Farr, emerging Europe economist for Capital Economics, said in a note. The MSCI index for emerging markets currencies inched 0.1% lower.

China's yuan fell to a 4-1/2-month low, as a robust dollar offset greenback sales by state-owned banks and a strong official guidance set for the local currency. Conversely, the dollar hovered near a 4-1/2-month peak against major peers as traders pared back bets on the timing of the Federal Reserve's first interest rate cut after data showed an unexpected expansion in U.S. manufacturing.

Suspected Israeli warplanes bombed Iran's embassy in Syria on Monday, keeping geopolitical tensions in focus. The Russian rouble weakened against the dollar after another Ukrainian drone attack on a refinery deep in Russian territory and as reduced foreign currency supply from exporters also weighed.

South Africa's rand ticked 0.5% higher against the dollar before the release of manufacturing and vehicle sales data. The Hang Seng gained 2.2%, led by energy and technology shares, boosting MSCI's index for emerging market stocks. Also supporting the index, Taiwan stocks closed at a record high amid higher inflows into Asian equities.

Turkish stocks added 0.9%, with its banking index jumping 2%. The Turkish Central Bank's net reserves rose around $1 billion last week, bankers said, with recent declines halting after last month's interest rate hike.

In South Asia, Indian shares slipped from record highs as rate-sensitive information technology (IT) stocks weighed. The rupee gained, ducking the weakness in its Asian peers on expectations of the central bank's intervention. The World Bank raised its forecast for Sri Lanka's economy, projecting growth of 2.2% for 2024 as the crisis-hit nation makes a faster-than-expected recovery.

HIGHLIGHTS: ** Chinese state banks sell dollars as yuan hits 4-1/2-month low, sources say

** Traditional pre-election rally eludes Indian stocks ** Polish manufacturing slump eases fractionally, PMI shows

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(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)