EMERGING MARKETS-EM stocks hit four-year high bets onn bigger fed cut build; rand climbs

By Pranav Kashyap and Twesha Dikshit

Sept 9 (Reuters) - A gauge tracking emerging market equities climbed to a four-year high on Tuesday as traders increased bets on a larger, half-point, Federal Reserve interest rate cut, while the South African rand traded at its strongest in two weeks.

The MSCI gauge for emerging markets stocks .MCSIEF rose 1% to its highest since October 2021, driven by gains in South Korean, Hong Kong and Taiwan equities.

Pressure kept building on the dollar, which dipped to a seven-week low as markets girded for labour data revisions that could tip the scales toward steeper rate cuts. CME's FedWatch tool pegs the chance of a 50 basis-point cut this month at 12%.

In Asia, Nepal's prime minister, K.P. Sharma Oli resigned, his aide said, following violent anti-corruption protests. The currency EURNPR=R rose 0.2% against the euro and 0.18% against the dollar NPR= in light volumes.

Indonesian assets remained under pressure with the benchmark stock index .JKSE dropping 1.5% while the rupiah IDR= weakened the most in five months after the nation's influential finance minister was removed from her post.

In central and eastern Europe, the Hungarian forint EURHUF= stumbled from a one-year high against the euro, poised for its steepest daily slide in nearly five months. Inflation data showed annual core inflation slowed to 3.9% in August from 4.0% in July, though the headline figure still remained outside the central bank's 2%–4% range, reason enough for officials to keep interest cuts off the table despite a frail economy.

Stocks in Budapest .BUX were flat.

South African stocks .JTOPI hit a new high and the rand ZAR= extended its winning streak to three days, touching late‑August levels ahead of second-quarter GDP data seen at 0.5%.

But with business confidence sagging under the weight of Africa's stiffest U.S. levies, the government is scrambling for tariff relief.

Elsewhere, Turkish stocks .XU100 inched up 0.1% from an over seven-week low it plumbed after falling for two consecutive sessions. The lira TRY= was largely flat.

The Russian rouble RUB= dropped 1% to an over four-month low. Yuan-denominated sovereign bonds should be issued on Russia's domestic market, with Chinese investors able to access the bonds through a direct link between the two countries' depositaries, the Russian Finance Ministry said.

The Israeli shekel ILS= snapped a four-day rally — its longest in over three weeks — as the military ordered Gaza City residents to evacuate ahead of a new offensive.

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