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EM stocks up 0.1%, FX flat

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Polish stocks plunge after bank tax hike

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Jerome Powell's speech at 1400 GMT

By Pranav Kashyap

Aug 22 (Reuters) - Most emerging market assets stayed in

a tight lane on Friday as investors braced for Federal Reserve

Chair Jerome Powell's much-anticipated speech later in the day,

while Chinese equities bucked the trend.

The blue-chip CSI 300 Index jumped 2.1% to its

highest level in over 10 months, while the Shanghai Composite

Index rose 1.4% to their highest in more than 10 years.

Technology stocks led the charge after DeepSeek rolled out

an upgrade to its flagship V3 AI model, while reports that

Nvidia ( NVDA ) asked Foxconn to halt work on the H20

AI chip buoyed Chinese chipmakers.

Elsewhere, Vietnamese stocks snapped a four-day

winning streak, dropping 2.5%.

In Central and eastern Europe, Polish equities

dropped 3.4%, on course for its biggest intraday drop in more

than four months.

The country's banking stocks plunged 5.8% after the

government planned to hike corporate income tax for banks to 30%

in 2026.

The zloty slipped 0.3% against the euro.

A gauge tracking the region's stocks fell

3.2% to a more than two-week low.

Meanwhile, Turkish stocks hit fresh record highs,

finally closing the gap with the broader EM equity gauge after

March's slide following Istanbul mayor Ekrem Imamoglu's

detention. The lira edged up 0.2%.

MSCI's gauge for equities in emerging markets

edged up 0.1%, while its currencies counterparts

was steady.

EM momentum stalled this week, with the equity index set to

break a two-week winning streak as traders hunker down for

Powell's speech at 1400 GMT, hunting for hints of a September

rate cut in the wake of recent signs of job market weakness.

But recent hawkish notes from U.S. officials and

inflation-tinged data have tempered the mood.

The CME FedWatch tool now pegs the odds of a 25-basis point

cut at 71.3%, down from 92% last week.

"We expect the speech to be non-committal about whether to

cut at the September meeting," Societe Generale's cross-asset

research analysts said.

"With inflation moving farther away from target and job

growth slowing, the Fed is in a tough spot."

Meanwhile, there were few breakthroughs on the

Russia-Ukraine peace talks front. U.S. President Donald Trump

said on Tuesday the United States could offer air support as

part of a potential deal to end the war.

An energy facility in Russia's Bryansk region, Unecha

-traversed by the Europe-bound Druzhba oil pipeline - caught

fire after reported Ukrainian missile and drone strikes.

Crude flows to Hungary via the Druzhba pipeline were halted

following the attack. The Hungarian forint slid to a

two-week low, set for its sharpest daily drop in more than four

months.

The Russian rouble was largely unchanged, while

Ukraine's international dollar bonds nudged lower.

For TOP NEWS across emerging markets

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For TURKISH market report, see

For RUSSIAN market report, see