EMERGING MARKETS-Hong Kong markets drag stocks lower, Chinese equities extend rally

Emerging market currencies were subdued and stocks eased on Thursday as shares in Hong Kong and India trailed Asian peers, while Chinese markets held on to a rally driven by a raft of policy support measures from Beijing. MSCI's index for emerging market (EM) currencies drifted 0.1% lower, as the dollar was steady after U.S. central bankers on Wednesday signalled little urgency to start easing policy.

Emerging market currencies were subdued and stocks eased on Thursday as shares in Hong Kong and India trailed Asian peers, while Chinese markets held on to a rally driven by a raft of policy support measures from Beijing.

MSCI's index for emerging market (EM) currencies drifted 0.1% lower, as the dollar was steady after U.S. central bankers on Wednesday signalled little urgency to start easing policy. A gauge of EM equities was down 0.3% at 0915 GMT after two days of gains.

Hong Kong's Hang Seng dropped 1.3%, pulled lower by a 6.1% decline in Alibaba Group Holding after the e-commerce giant missed third-quarter revenue estimates. Indian stocks also fell 1% following the Reserve Bank of India's (RBI) decision to keep its key interest rate unchanged. The rupee traded flat at 82.9700 to the dollar.

"Given the moderating inflation trajectory, and the pivot in the global monetary cycle, we continue to think a window may open for the RBI to begin its own easing in June," Barclays economists said in a research note. "Still, with the bar having been raised for a March Fed cut and the RBI governor's hawkishness signalling comfort on domestic growth, we think the risk of a delay exists." China's blue-chip index and the Shanghai Composite Index advanced 0.6% and 1.3% respectively ahead of a week-long holiday beginning on Friday for the Lunar New Year.

Both indexes clocked their biggest weekly gains in more than a year after a change of leadership at the market regulator and a number of recent steps undertaken by authorities to shore up investor confidence. Data showed China's consumer prices fell at their steepest pace in more than 14 years in January.

Hopes for stronger stimulus measures from China has aided sentiment towards emerging markets in recent days though uncertainty around the Fed's monetary policy path has kept a lid on the advance. The Turkish lira was flat at 30.6035 to the dollar while Turkish stocks climbed 1.1%.

The new head of Turkey's central bank said the bank would maintain its tight policy stance until inflation drops to target. HIGHLIGHTS

** Pakistan elections underway, five killed in militant attacks ** South African President Cyril Ramaphosa to address parliament, rand down 0.3%

** Interest rate decisions from Czech Republic, Mexico and Peru due For TOP NEWS across emerging markets

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