(Updated at 0845 GMT)

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India's economy to grow 6.5%-7% in 2024/25, govt report

says

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Polish c.banker Duda says rate-cut talks possible in H2,

2025

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Moody's upgrades Turkey's ratings on tight monetary policy

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Israel-Hamas deal in focus as Netanyahu heads to

Washington

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Stocks down 0.5%, FX off 0.1%

By Johann M Cherian

July 22 (Reuters) - Stocks and currencies in developing

markets started the week on a dour note, however China's bonds

edged up following a surprise central bank policy decision and

Ukraine's dollar bonds advanced following a preliminary debt

rework deal.

MSCI's index tracking equities in emerging markets

dropped to a near one-month low, extending the previous week's

pullback, led by tech-heavy indexes in Taiwan and South

Korea which were down 2.6% and 1.1%, respectively.

Following two-straight weeks of gains, the MSCI index logged

its steepest weekly loss in nearly two months on Friday.

An index tracking currencies eased 0.1%

against the dollar to more than a two-week low as markets

digested U.S. President Joe Biden's decision to bow out of the

election race. Mexico's peso, however, strengthened 0.5%.

Yields on Chinese bonds

slipped between 2 and 4 basis points (bps) across

the curve after the People's Bank of China lowered a key

short-term policy rate and its benchmark lending rates.

"While today's rate cuts offer some reassurance that

policymakers are being responsive to the recent loss of economic

momentum, the heavy lifting will need to come from fiscal, not

monetary, policy," said Julian Evans-Pritchard, head of China

economics at Capital Economics.

In south Asia, Indian equities inched 0.1%

lower and the rupee hit an all-time low of 83.67 to the

dollar as caution prevailed ahead of a budget announcement on

Tuesday following recent elections.

A finance ministry survey showed India's economy is expected

to grow 6.5% to 7% in the current year.

Elsewhere, Turkish equities added 0.6%, ahead of a

central bank monetary policy decision later in the week. Ratings

agency Moody's upgraded the country's ratings to "B1" from "B3",

citing improvements in governance and a tighter stance on

monetary policy.

Separately, President Tayyip Erdogan, quoted by Turkish

media, said a potential change in the U.S. administration after

November's election may be positive for Turkey's growing defence

industry.

Meanwhile, the yield on Ukrainian dollar bonds maturing in

2034 fell 4.2 bps after the war-torn country

announced a preliminary deal to restructure $20 billion in debt

with its bondholders.

In central and eastern Europe, Poland's zloty

inched up 0.1% against the euro. Local central banker Iwona Duda

said inflation would increase at the beginning of 2025, adding

that a discussion on interest rate cuts could start only in the

second half of next year.

Attention was also on any deal to end the prolonged Middle

East conflict as Israeli Prime Minister Benjamin Netanyahu

visits Washington this week. The shekel firmed 0.5%.