EMERGING MARKETS-EM equities at record highs on Trump's Greenland dial-down; focus on Ukraine peace talks

By Twesha Dikshit and Ragini Mathur

Jan 22 (Reuters) - Emerging market equities were trading at record highs on Thursday as geopolitical rhetoric dialled down after U.S. President Donald Trump pulled back from tariff threats against Europe and ruled out the use of force to obtain Greenland.

Trump's comments lifted global market sentiment, after markets stalled last week due to global worries despite a strong start to the year.

The MSCI's gauge of emerging equities .MSCIEF rose 0.7%, while a corresponding currencies index .MIEM00000CUS was little changed.

ING analysts said since little was known about the Greenland framework deal, "markets may require learning more about that and perhaps a few days of additional conciliatory remarks to finally turn their focus away."

U.S. envoy Steve Witkoff said in Davos that a "lot of progress" had been made in peace talks between Russia and Ukraine, with the negotiations down to a single issue.

Ukrainian bonds rallied, with those maturing in 2035 and 2036 XS2895057177=TE, XS2895056526=TE up almost as much as 2.5 cents against the dollar, according to TradeWeb data.

Trump and Ukraine's Volodymyr Zelenskiy are due to meet in Davos later in the day, while U.S. envoys Witkoff and Jared Kushner will meet with Russia's Vladimir Putin in Moscow.

STOCKS BROADLY HIGHER, DOMESTIC DATA WATCHED

Turkey's stocks .XU100 rose 0.7% ahead of a monetary policy decision later in the day. A Reuters poll of economists expects the central bank to continue its easing cycle, with a 150 basis point cut at the first policy meeting of the year.

Central bank data showed business confidence among Turkish manufacturers rose in January.

Poland's benchmark index .WIG20 gained 1.4% ahead of domestic inflation and employment data for December, while the zloty EURPLN= was slightly weaker against the euro.

Romania's index .BETI led gains in the region, advancing 2%. Czech Republic's .PX added almost 1%.

Currencies in the region were trading in a tight range against the euro.

Over in Asia, most stocks traded around record highs with indexes in tech-heavy South Korea .KS11 and Taiwan .TWII rising 0.9% and 1.6%, respectively, on AI-driven optimism.

EM equity exchange-traded funds have attracted substantial inflows due to cheaper valuations and growth prospects, with Refinitiv Lipper data showing inflows of about $14 billion so far in January, on track for a monthly record.

Meanwhile, Chinese lending to Africa had its first annual decline since the COVID-19 pandemic, halving to $2.1 billion in 2024, according to Boston University data.

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