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EM stocks down 0.4%, FX flat

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Czech flash CPI +2.5% y/y in August

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India cuts consumption taxes to revive local demand

By Pranav Kashyap and Twesha Dikshit

Sept 4 (Reuters) - Emerging market stocks were mixed on

Thursday as investors assessed dovish Federal Reserve signals,

though China bucked the trend as it fell for a third straight

day.

A gauge tracking emerging market equities fell

0.4%. A similar gauge for currencies was flat.

Shanghai stocks dropped by 1.2%, while Hong Kong's

Hang Seng lost 1.1%. The blue-chip fell 2.1%

and was set for its biggest daily fall in nearly five months.

Reports that regulators may ease short-selling curbs drove

profit-taking, curbing investment appetite weeks after an

AI-driven surge had drawn money into Chinese equities.

"China quasi-regulatory curbs on excessive speculation may

cool the rally but the equity market dividend yield is still

higher than government bond yields, which is a powerful driver

of local investor capital into stocks," said Hasnain Malik, EM

equity and geopolitics strategist, at Tellimer.

Indian equities popped up 1% at the open as

the government cut consumer taxes on hundreds of products to

bolster domestic demand and cushion U.S. tariff pain that has

driven the rupee to record lows. The currency was

steady on the day.

In central and eastern Europe, the Czech crown

slipped 0.1%, while equities in Prague inched up 0.2%

after data showed inflation slowed in August as expected.

In Thailand, inflation fell more-than-expected in August,

data showed. Still, stocks in Bangkok fell 0.2%, as

candidates vie for power following the sacking of the country's

prime minister.

Malaysian equities were little changed after the

central bank held rates steady as expected, citing soft

inflation alongside resilient growth.

The mood was more positive after Fed officials, including

Governor Christopher Waller, backed rate cuts in the coming

months.

Analysts predict emerging markets will also ease rates once

the Federal Reserve begins to cut, providing a widespread boost

to investor sentiment.

Traders have factored in a cut to interest rates at the

Fed's September meeting, the CME Group's FedWatch tool showed.

Signs of strain in U.S. labour data have stirred EM currency

volatility and sharpened the focus on jobs prints - with private

payrolls due later in the day and non-farm payrolls on Friday.

Talks among Ukraine's allies focused on potential security

guarantees if a ceasefire is reached. Ukrainian international

dollar bonds were flat, while the Russian rouble hit a

one-month low.

Russian President Vladimir Putin said on Wednesday peace

could come via negotiation "if common sense prevails," but he

did not rule out ending the war by force.

Turkish stocks were on track for their worst week

since March 17, as authorities ordered fresh detentions of

opposition figures in another legal salvo against President

Tayyip Erdogan's rivals.

For TOP NEWS across emerging markets

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For TURKISH market report, see

For RUSSIAN market report, see