EMERGING MARKETS-EM currencies rise on Fed rate-cut hopes, equities mixed

By Pranav Kashyap

Aug 21 (Reuters) - Most emerging market currencies edged higher on Thursday, buoyed by growing bets on a Federal Reserve rate cut next month, even as equity markets wavered in the wake of Nvidia's NVDA.O earnings that came up short of some analysts' expectations.

Chinese stocks stood out among peers on the back of a 7.3% surge in local semiconductor stocks .CSI99000. The blue-chip .CSI300 jumping 1.8%, while the Shanghai Composite index .SSEC rose 1.1%.

Hong Kong stocks .HIS, however, fell 0.8%.

Global investors digested Nvidia's results, whose shares dipped 1.6% in U.S. premarket trade as the fate of its China business hung in the balance. The company's performance tends dictate the global tech rally.

Investors fretted over sky-high valuations of Wall Street technology companies and their massive investments in AI, especially after Chinese startup DeepSeek unsettled the industry with a low-cost model that rivalled the performance of leading U.S. systems from companies like OpenAI.

The MSCI gauge for equities in emerging markets .MSCIEF fell for the third straight day and is on course for its longest losing streak in a month.

India's benchmarks .NSEI, .BSESN fell 0.7%, a day after additional 25% punitive U.S. tariffs on Indian imports took effect. The rupee INR=IN, however, was largely steady.

Central and eastern European stocks climbed on Thursday, with the regional equity gauge .MIME00000PUS rebounding 0.5%after a choppy run of losses in three of the last four sessions.

But trading across the region remained tight, as analysts flagged investor caution amid a lack of positive momentum in the Ukraine-Russia conflict.

The only stand-out currency was the Hungarian forint EURHUF=, down 0.7%, poised for its biggest intraday drop in over two months.

Kyiv's international dollar bonds rose over one cent on the day, following a run of losses in recent days. The Russian rouble RUB= was flat against the U.S. dollar.

The greenback =USD faltered, lifting most Asian currencies, as traders doubled down on Fed rate-cut bets after New York Fed chief John Williams cracked the door open to easing.New York Fed chief John Williams signaled a cut was possible.

"We expect a rate cut in September, and then it depends on the data whether we are going to see a second one before the end of the year," said Rabobank analysts.

According to CME's FedWatch tool, markets see a 87.2% chance of a 25-basis point cut in September, up from about 80%.

HIGHLIGHTS:

Philippine central bank cuts interest rates by 25 bps

South Korea keeps rates unchanged on debt risks, flags US headwinds

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For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB