EMERGING MARKETS-Stocks gauge up nearly 2% on China boost; focus on trade war risks

By Shashwat Chauhan

March 5 (Reuters) - An index for emerging market stocks jumped on Wednesday, with Chinese shares up after Beijing set an ambitious economic growth target and vowed more economic support, while markets assessed trade war risks after the latest rounds of U.S. tariffs.

Shares in Mainland China .CSI300 and Hong Kong .HSI advanced 0.5% and 2.8%, respectively after Beijing announced more fiscal stimulus, promising greater efforts to support consumption at the opening of the annual meeting of China's parliament.

Beijing's 2025 growth target of roughly 5% and a larger budget deficit of around 4% of economic output that Premier Li Qiang presented to parliament confirmed a December Reuters report.

"Meeting that target will be more challenging in the face of higher US tariffs and existing economic headwinds, and the government is unlikely to be able to count on a surprise uptick in exports this year as it did in 2024 to help it achieve its goal," National Bank of Kuwait analysts said in a note.

AI advancement was given more space in Li's speech this year compared with 2024, which pushed a gauge of Chinese AI stocks .CSI930713 1.4% higher.

MSCI's broad gauge for EM stocks .MSCIEF jumped 1.8% by 0858 GMT, with a rebound in beaten-down Indian shares .NSEI also lending a hand.

In Europe, Ukraine's international bonds rallied after U.S. President Donald Trump said Ukraine was ready to negotiate over the war with Russia.

The 2035 maturity XS2895057177=TE was trading 0.7 cents higher and was bid at 62 cents on the dollar, regaining some of its recent losses.

Polish blue-chip stocks .WIG20 jumped 2.9%, a day after its biggest single-day drop since September 2022. The Hungarian benchmark .BUX also bounced back with a 2.1% increase.

Stocks sold-off around the world in the last session after Trump's 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%.

However, there was some respite after U.S. Commerce Secretary Howard Lutnick said Trump was considering providing some relief to companies that comply with rules under the U.S.-Mexico-Canada Agreement on trade.

The Mexican peso MXN=, which trades around the clock, was last up 0.2% against the dollar.

MSCI's index for EM currencies .MIEM00000CUS also perked 0.4% up amid a global dollar weakness.

Markets were also assessing Trump's first presidential address to Congress since taking office on January 20. Trump reiterated his intention to impose additional reciprocal tariffs on April 2, a move that would likely roil financial markets even more.

Central Eastern European (CEE) currencies were stable against the euro in the lead up to a likely interest rate cut by European Central Bank (ECB) later this week.

Global markets will also track U.S. job data due on Friday on growing concerns ab out the economy's health, with traders ramping up bets of greater monetary policy easing by the Federal Reserve this year.

HIGHLIGHTS:

** Vietnam raises $470.40 million in bond auction, bourse filing shows

** China's services activity grows modestly in February, Caixin PMI shows

** South Africa's business downturn eases in February, PMI shows

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