EMERGING MARKETS-EM Stocks rise as US court hits brakes on Trump tariffs; S.Africa rate decision on deck

By Pranav Kashyap

May 29 (Reuters) - Emerging market equities advanced after a U.S. court block on most of President Donald Trump's tariffs, while traders in South Africa braced for an imminent interest rate decision.

The MSCI index of emerging market equities .MSCIEF nudged up 0.5%.

A U.S. trade court, in a sweeping rebuke, blocked most of Trump's tariffs, declaring he had overstepped his presidential authority by slapping across-the-board duties on imports. However, the White House swiftly filed a notice of appeal and challenged the court's authority.

The news jolted Asian markets, with Hong Kong's Hang Seng .HIS up 1.3%, while the Shanghai Composite Index .SSEC climbed 0.7%.

"The ruling is seen as a significant check on executive power in trade policy and is fuelling a broad rally in risk assets," said Elias Haddad, senior markets strategist at Brown Brothers Harriman.

South Korea's Kospi .KS11 surged 1.9%, hitting its highest in nine months. The country's central bank, just days before a presidential election in Asia's fourth-largest economy, sliced interest rates for the fourth time in its current easing cycle, a move aimed at shoring up an economic recovery that had been clouded by the now-contested U.S. tariffs.

The broader EM currency counterpart .MIEM00000CUS remained flat, as the U.S. dollar itself found strength on the tariff news.

Still, the currency index is charting a course towards its best monthly performance in over a year and a half, largely thanks to an earlier, weaker dollar—a softness fuelled by persistent anxieties over Trump's unpredictable trade manoeuvres and U.S. fiscal stability.

Elsewhere, the South African rand ZAR= slipped 0.2%, while stocks in Johannesburg .JTOPI gained 0.5%.

The markets awaited the South African Reserve Bank's (SARB) interest rate decision and the release of monthly producer inflation figures.

The consensus leaned towards a 25-basis-point cut in borrowing costs to 7.25%, especially with inflation comfortably undershooting the midpoint of the central bank's target range.

Stocks across Central and Eastern Europe largely joined the upward trend, with Czech shares .PX gaining 0.4% and Poland's equities WIG20 rising 0.2%.

The Romanian leu EURRON= was poised to notch its best month in nearly three years, following centrist Nicusor Dan's recent presidential victory.

JPMorgan noted in its outlook that Dan's win was set to dial down political risk.

Meanwhile, Ghana's cedi GHS= has jumped more than 40% versus the U.S. dollar this year, far outperforming its African and emerging market peers, shrinking the cost of the country's foreign debt and giving it more fiscal breathing room.