EMERGING MARKETS-Stocks set for marginal weekly fall, Hungary's forint lags peers

Most currencies in emerging Europe were range-bound, though the Hungarian forint eased 0.5%, on track to be worst performing currency amongst local peers this week after its central bank had reduced its lending rate by 100 basis-points on Tuesday. The Czech crown held steady at 25.333, hovering near 21-month lows, while Poland's zloty was also trading flat.

The Hungarian forint was on track to log sharp weekly losses on Friday, the worst hit amongst local peers following a bumper rate cut earlier this week, while a gauge of emerging market stocks also eyed weekly declines.

By 0912 GMT, MSCI's index for EM stocks rose 0.2% after heavyweight Chinese stock indexes closed higher, though it was on track for weekly losses, snapping a five-week winning streak. EM stocks saw their first outflow since November, down $1 billion, driven by a $1.6 billion shift out of China-exposed funds, which was the biggest outflow since October, a report from Bank of America Global Research showed.

Shares in Mainland China ended 0.6% higher, while Hong Kong's Hang Seng added 0.5% as investors await cues of stimulus from Beijing's key political gathering next week. Bolstering calls for more stimulus measures, an official survey showed China's manufacturing activity in February shrank for a fifth straight month.

"The January and February PMIs, taken together, revealed that services demand was in a better state than manufacturing. Both remain sub-par, signalling a still-soft economy," strategists at UBS Global Wealth Management wrote. Most currencies in emerging Europe were range-bound, though the Hungarian forint eased 0.5%, on track to be worst performing currency amongst local peers this week after its central bank had reduced its lending rate by 100 basis-points on Tuesday.

The Czech crown held steady at 25.333, hovering near 21-month lows, while Poland's zloty was also trading flat. Latest surveys showed Central European manufacturing activity showed some signs of improvement in February as a downturn in Poland and the Czech Republic eased, while Hungary's production increased.

Turkey's lira was last at 31.325 after the country's factory activity expanded very slightly in February after shrinking for eight straight months. A broader gauge of EM currencies edged 0.1% lower, though set for marginal weekly gains.

Stocks in Central Eastern Europe had a bright start, as global sentiment remained upbeat following an in-line reading of U.S. inflation, keeping alive bets of a Federal Reserve rate cut in June. Warsaw blue-chips rose 0.7%, and Hungarian stocks added 0.5%.

South Africa's main stock index, however, fell 0.5%, while the rand was flat at 19.2 per dollar, eyeing a slight weekly advance. Focus would remain on a broader euro zone inflation reading due later in the day, a crucial metric in gauging the European Central Bank's outlook for monetary policy.

HIGHLIGHTS: ** G20 finance chiefs fail to reach joint statement amid Gaza, Ukraine debate

** Russian manufacturing sees fastest growth in seven years in Feb, PMI shows For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see For TURKISH market report, see

For RUSSIAN market report, see