EMERGING MARKETS-Stocks rise as China, HK shares rebound; rand advances

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China's central bank to cut banks' reserve ratio from next month

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South African rand jumps as inflation falls MoM

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EM stocks up 1.1%, FX flat

By Shashwat Chauhan

Jan 24 (Reuters) -

Emerging market equities advanced on Wednesday, propped up by Chinese and Hong Kong shares, while the South African rand jumped after the country recorded a fall in monthly inflation.

MSCI's gauge for emerging markets stocks gained 1.1% as of 0901 GMT, touching over one-week highs, while currencies were mostly flat.

Hong Kong's Hang Seng rose 3.6% and led gains across Asian markets, propped up by a 7.3% jump in Alibaba after a report said its co-founder Jack Ma and Chairman Joe Tsai bought millions worth of its shares in the fourth quarter.

Chinese blue-chip shares also advanced over 1%.

China's central bank will cut the amount of cash that banks must hold as reserves from Feb. 5, governor Pan Gongsheng said, the first cut for the year as policymakers extend efforts to shore up a fragile economic recovery.

"Markets have been expecting the RRR cut for a while so the announcement is not entirely a surprise," said Christopher Wong, Currency Strategist at OCBC in Singapore.

"That said, policymakers should ride on the positive momentum by announcing some form of support measures for the economy targeting consumption."

The South African rand appreciated 0.8% against the dollar and was last at 18.8808 after data showed the country's headline consumer inflation fell to 5.1% year-on-year in December from 5.5% in November.

South African equities also advanced 1.1%.

The data comes ahead of the South African Reserve Bank's (SARB) monetary policy decision on Thursday, where the bank and is expected to keep its repo rate steady at 8.25%.

"Recent commentary from Governor Kganyago over recent weeks have been hawkish indicating despite easing price pressures, the SARB is in no rush to start its easing cycle," said David Omojomolo, Africa economist at Capital Economics.

In Europe, the Polish zloty edged 0.1% higher against the euro, while the Czech crown was flat, hovering near a 20-month low hit last week.

Romanian shares lagged European peers, down 1.7%, while equities in Dubai were the best performing in the Gulf, advancing 1.9%.

Elsewhere, Malaysia's central bank kept its benchmark interest rate unchanged at 3% at its first policy meeting for the year. The ringgit was last down 0.2%.

Fitch Ratings forecasts a decline in economic growth across Latin America this year amid dampened demand, high borrowing rates and considerable exposure to China and the U.S., which are also facing a slowdown.

For GRAPHIC on emerging market FX performance in 2024, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2024, see https://tmsnrt.rs/2OusNdX

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For RUSSIAN market report, see (Reporting by Shashwat Chauhan in Bengaluru; Additional reporting by Rae Wee; Editing by Varun H K)