EMERGING MARKETS-Stocks gain for third day; Turkey, South Africa in focus

Emerging market stocks rose on Thursday as a rebound in Chinese equities gained momentum on policy support signals, while currencies were flat in the run up to interest rate decisions from Turkey and South Africa. MSCI's index for emerging market (EM) stocks climbed 0.5% by 0900 GMT, extending gains to a third straight day.

Emerging market stocks rose on Thursday as a rebound in Chinese equities gained momentum on policy support signals, while currencies were flat in the run up to interest rate decisions from Turkey and South Africa.

MSCI's index for emerging market (EM) stocks climbed 0.5% by 0900 GMT, extending gains to a third straight day. Stocks in China pulled further away from five-year lows touched earlier in January after the central bank announced a deep cut to bank reserves on Wednesday in a strong signal of support for the country's sagging stock market.

The domestic blue-chip index and Hong Kong's Hang Seng advanced 2% each. Optimism around stimulus from China has helped EM assets recover from declines earlier this month when traders scaled back bets of rate cuts from the U.S. Federal Reserve.

A broader gauge of regional currencies was flat against the dollar. At the top of investors' watch list for the day are interest rate decisions from Turkey and South Africa.

The lira was slightly weaker at 30.2850 to the dollar ahead of the policy verdict due at 6 a.m. ET (1100 GMT). Turkey's central bank is expected to raise interest rates by another 250 basis points to 45%, marking the end of its aggressive tightening cycle, according to a Reuters poll.

"The primary issue will continue to be whether the magnitude of implemented rate hikes will truly tame Turkey’s longstanding inflation problem, or the lira will continue to depreciate, which will keep the inflation-FX spiral going," said Commerzbank FX analyst Tatha Ghose in a research note. Meanwhile, the South African Reserve Bank is likely to keep its repo rate steady at 8.25% at 1300 GMT. The rand was steady at 18.8878 to the dollar, while yield on the benchmark 2030 government bond rose slightly to 9.760%.

"Expectations currently are that the Reserve Bank will start to lower rates in about May this year barring any surprises," said Shaun Murison, senior market analyst at IG markets. South Korean shares were flat, pressured by losses in battery maker stocks such as LG Energy Solution after U.S. EV maker Tesla warned of slowing sales growth.

HIGHLIGHTS ** Turkey's BIST-100 rises 1.1% to 3-month high

** India's Tech Mahindra drops 6.2% after Q3 profit miss ** Hungarian forint outperforms CEE currencies, up 0.4% vs euro

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