EMERGING MARKETS-Stocks climb for fourth day on some tariff reprieve, FX flat

By Johann M Cherian

April 15 (Reuters) - Risk taking across emerging markets showed signs of improving on Tuesday, with stocks rising for the fourth straight day on the likelihood that more items could see exemptions from U.S. tariffs.

U.S. President Donald Trump hinted that he was considering modifying the 25% tariffs imposed on foreign auto and auto parts imports, sending shares of carmakers across Japan, Korea, India and Europe soaring.

More broadly, MSCI's index tracking stocks across developing markets .MSCIEF rose 0.9%. Bourses in Taiwan .TWII, Korea .KS11 and those in central and eastern Europe .MIME00000PUS gained about 1%, while Indian equities .NSEI, .BSESN rose 2%.

Financial markets got some relief from a recent rout after Trump temporarily paused reciprocal tariffs on world economies late last week and also said electronics items could face separate duties.

However, the likelihood that duties on pharmaceutical and semiconductor imports into the U.S. were imminent kept optimism among investors in check, while brokerages lowered their growth expectations, citing trade uncertainty.

A gauge for emerging market currencies .MIEM00000CUS was flat against a weaker dollar, putting the index a whisker away from hitting its highest level this year.

Investors have been concerned that a global trade war could weigh on the sovereign credit of vulnerable smaller economies.

However, analysts have also noted that a recent weakness in the greenback could make commodity imports – a key resource for developing markets – cheaper, while uncertainty is likely to nudge domestic governments to induce fiscal and monetary stimulus to shore up their economies.

"I would bet more on the monetary stimulus... which can be easily done within the next six months and you would immediately see the effect," said Vladimir Miklashevsky, an independent Finnish analyst.

In close focus is Chinese President Xi Jinping's tour of Southeast Asia, at a time when the countries which are facing the highest U.S. duties are looking to negotiate trade deals with Washington during the 90-day pause.

"This is the first clear time when China is showing that they are ready to be on their own, and are also attracting local players, which have been historically their rivals," Miklashevsky added.

In Europe, Hungary's forint EURHUF= depreciated 0.4% against the euro, trading close to a more than two-month low.

The Hungarian central bank's deputy governor-designate said the institution must maintain positive real interest rate to ensure both financial market and price stability.

The country is facing the sharpest inflationary surge in three years ahead of a crucial parliamentary election next year.

In South Africa, the rand ZAR= appreciated 0.4% on expectations that the ruling coalition could hold as a news report suggested that the biggest political party, the African National Congress, may back down on a plan to raise value-added tax, the budget's most contentious element.

Markets were also monitoring developments around a long-awaited Russia-Ukraine peace deal. The rouble RUB= firmed 0.5%, while Kyiv's hard-currency bonds were little changed.