*

EM stocks down 0.7%, FX flat

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Trump's tariffs to remain in effect as appeals court

grants stay

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Turkey's economy 2% in Q1, below forecasts

*

Polish 2nd round of elections on Sunday

By Pranav Kashyap

May 30 (Reuters) - Emerging market equities skidded to a

two-week low on Friday, while currencies held their ground, as

investors weathered another twist in the Trump administration's

efforts to reset the United States' global trade relations

through tariffs.

The MSCI index of emerging market equities fell

0.8%, while its counterpart for currencies was

little changed.

On Wednesday, a trade court ruled that U.S. President Donald

Trump had overstepped his authority in imposing sweeping tariffs

on imports from most of the United States' trading partners.

The United States Court of Appeals for the Federal Circuit

in Washington temporarily reinstated the duties while it

considers an appeal by the Trump administration.

Despite the turbulence, the currency index was poised for

its longest monthly winning streak in more than four years,

while the stocks index was aiming for its best monthly

performance in nearly nine months.

Investors were shifting their gaze towards other assets

globally, seeking refuge from the fading allure of U.S.

investments amidst tariff uncertainties and the potential of a

ballooning fiscal deficit.

The U.S. dollar was set to mark its fifth consecutive

month of decline.

"We expect further market volatility ahead as headlines on

both trade and fiscal policy emerge in the weeks and months

ahead. Near-term gains this year are likely to be more limited,"

said Mark Haefele, Chief Investment Officer, UBS Global Wealth

Management.

In Central and Eastern Europe, Romania's leu was

on track for its most impressive monthly performance in nearly

three years, bolstered by centrist Nicusor Dan's presidential

victory, which fuelled investor confidence.

Meanwhile, the zloty faced a 0.6% monthly dip as

the nation braced for the second round of Poland's presidential

election on Sunday, where a poll showed Warsaw Mayor Rafal

Trzaskowski holding a narrow lead over nationalist opponent

Karol Nawrocki.

Polish stocks fell 1.1%, to a more than one-week

low.

Separately, Poland's flash consumer prices for May came in

slightly below expectations.

Turkey's economic narrative unfolded with fresh data

indicating a modest 2% expansion in the first quarter, falling

short of expectations.

The lira was set to record its 12th consecutive month

of losses.

Stocks in Istanbul slid 1% on the day, with bank

stocks down 1.8%.

The central bank's tightening of policy rates by 350 basis

points in March and April aimed to quell the market unrest

following Istanbul Mayor Ekrem Imamoglu's arrest.

Economists warned that while inflation was being tempered,

economic growth could face headwinds.

Elsewhere, the Czech koruna remained flat. Data

revealed an unexpected 0.8% surge in economic output for the

first quarter, marking the highest growth since late 2021.

In Kenya, inflation dipped to 3.8% year-on-year in May, down

from 4.1% the previous month, nudging the shilling

slightly stronger.

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