EMERGING MARKETS-FX steady in final countdown to US tariffs; South Africa budget in focus

By Johann M Cherian

April 1 (Reuters) - Currencies across developing markets were steady on Tuesday as investors cautiously awaited details of U.S. President Donald Trump's reciprocal tariffs, while South Africa's rand slipped on prolonged negotiations over the domestic budget.

MSCI's index tracking emerging market currencies .MIEM00000CUS was flat against the dollar, while a gauge for stocks .MSCIEF rose 0.7%, bouncing back from two-week lows.

Trump is expected to announce reciprocal trade barriers on Wednesday that are set to match other countries' higher tariff rates for specific goods and compensate for non-tariff barriers that put U.S. exports at a disadvantage.

Analysts say the policies could dent global growth, especially for trade-reliant developing economies. Still, the MSCI indexes finished the previous quarter on a strong note as investors looked for bargains out of the U.S.

Indian stocks .NSEI, .BSESN fell more than 1.5% as trading resumed after a public holiday in the previous session.

Where tariffs are concerned, "India is more likely to be in the firing line this time around," Diederik Stadig, an economist at ING, said in a note.

"Trump has repeatedly referred to the country as a 'tariff king' in the past, and last week, the U.S. President reiterated his comments on wanting to institute tariffs on the import of pharmaceuticals."

In South Africa, the rand ZAR= weakened 0.3% and the benchmark bond ZAR2030= slipped, with the focus on final negotiations on the national budget. The lower house of parliament could potentially vote on the bill on Wednesday.

The local currency has depreciated about 0.7% since the annual budget was postponed in early March as coalition partners disagreed on a plan to hike value-added tax by 2 percentage points to 17%.

In eastern and central Europe, Poland's zloty EURPLN= firmed 0.3% against the euro after a survey showed the manufacturing sector posted its strongest performance in nearly three years in March.

The domestic central bank is also expected to convene on Tuesday and decide on policy rates, with economists polled by Reuters anticipating no change.

Hungary's forint EURHUF= was flat, while local stocks .BUX gained 0.7%. MBH Bank MBHB.BU lost 1.5% on signs that the Hungarian state was mulling a potential sale of its 20% stake in the lender.

In China, Shanghai equities .SSEC rose 0.3% as data showed business activity expanded in March, bolstered by robust export orders.

Hong Kong stocks .HSI added 0.3%, with CK Hutchison 0001.HK climbing 1.7% ahead of a deal to sell the conglomerate's Panama ports to a BlackRock-led group that is due to be signed by April 2.

Israel's shekel ILS= strengthened 0.6%, while the local stock index .TA125 added 0.6%. Credit ratings agency Fitch affirmed the country's ratings and outlook, but flagged risks from a high public debt/GDP ratio and the ongoing conflict with Gaza.