EMERGING MARKETS-EM currencies inch up, stocks rebound as commodities regain footing

By Purvi Agarwal

Feb 3(Reuters) - Most emerging market currencies inched higher on Tuesday, after three sessions of declines, and stocks rebounded as the sell-off in commodities eased, putting them on the upward trajectory again.

MSCI's index tracking global EM stocks .MSCIEF jumped 2.5%, set for its biggest one-day jump since April. The index fell more than 4% in the last three sessions, as a rout in metals pressured equities in resource-heavy economies.

On Tuesday, gold surged more than 5%, on track for its biggest daily gain since November 2008 and silver jumped as they staged a comeback after their steepest two-day drop in decades.

South African stocks .JTOPI climbed 1.5%, after falling over 5% in the last two sessions. The recovery was largely supported by gold miners, while the currency ZAR= appreciated 0.4%.

Most Asian stocks also gained. South Korea's KOSPI .KS11 climbed nearly 7% to close at a record high, tracking overnight gains in U.S. tech stocks and on expectations of domestic market reforms.

India's stocks .NSEI gained 2.6% and the rupee appreciated INR=IN 1.4% after the country clinched a trade deal with the U.S. that lowered tariffs on Indian goods to 18% from the previous 50%. India will also halt Russian oil purchases under the deal.

The optimism showed in emerging Europe as well, with regional bourses in Hungary .BUX and Poland .WIG20 up 1.5% and 1.6% respectively. Romania's stocks .BETI were 1.2% higher.

"Risk sentiment (has) stabilised and so far there has been little contagion from the precious metals complex. The move in gold and silver was dominantly driven by positioning rather than a change in fundamentals... some clearing of weak hands is healthy," said Mohit Kumar, an economist at Jefferies.

U.S. President Donald Trump's nomination of former Federal Reserve governor Kevin Warsh on Friday supported the dollar index =USD, which pressured commodities. However, the greenback stabilized on Tuesday, with trading largely muted.

Most currencies in Asia appreciated against the dollar, lifting MSCI's index tracking EM currencies .MIEM00000CUS up 0.5% after three sessions of declines.

Turkey's lira TRYTOM=D3 was subdued, with its stocks .XU100 rising 1.2%. Consumer price inflation in Turkey leapt to a higher-than-expected 4.84% month-on-month in January, data showed.

Currencies in emerging Europe were little changed against the euro.

Meanwhile, Ukraine agreed with Western partners that any persistent Russian violations of a future ceasefire agreement would trigger a co-ordinated military response from Europe and the U.S., the Financial Times reported, citing people briefed on the discussions.

Ukraine's international government bonds climbed as much as 1.5 cents on the dollar following the report, leaving the majority of them XS2895055981=TE, XS2895056369=TE at their highest since they were restructured in September 2024.

HIGHLIGHTS:

Iran, US to hold nuclear talks on Friday as Trump warns Tehran

South Korea consumer inflation eases to five-month low

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