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Fed Chair Jerome Powell set to speak on Monday

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China stocks set for best month in nearly a decade

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Colombia, Jamaica interest rates decisions due

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Stocks up 0.6%, FX up 0.1%

By Ankika Biswas

Sept 30 (Reuters) - Hefty gains in heavyweight Chinese

shares on the back of a raft of stimulus measures have launched

the emerging markets stocks index on a path to its best month in

ten, while Sri Lanka's sovereign dollar bonds on Monday jumped

to their July highs.

China's blue-chip CSI300 is up around 21% for the

month, poised for its best month since December 2014, and the

Shanghai Composite, up over 17%, eyed its biggest

monthly gain since April 2015. Hong Kong's Hang Seng is

also set for its best month in nearly two years.

Both Chinese indexes climbed over 8% for the day, boosted by

property developers' stocks, after the central bank noted that

banks will need to lower mortgage rates for existing home loans

before Oct. 31, coupled with Guangzhou city's lifting of all

restrictions on home purchases and Shanghai and Shenzhen easing

curbs on buying.

The measures aimed at easing the beleaguered property market

came after a series of recent aggressive stimulus measures -

including outsized rate cuts - to prop up the ailing economy.

The MSCI index for EM stocks has climbed nearly 7%

this month, eyeing its best month since November, with the

currencies index logging a three-month winning

streak for the first time this year.

The currencies and stocks indexes are also set to log their

best quarters in one and two years respectively.

The remarkable journey for the EM asset classes is also

attributable to the euphoria around the Federal Reserve's

larger-than-usual 50-basis-point rate cut this month.

All eyes are now on Fed Chair Jerome Powell's remarks at

1755 GMT, for further clues on the U.S. rate-cut cycle.

Capital Economics' analysts noted the EM easing cycle, Fed's

rate cut and China's policy measures were the key positives for

EM stocks, while any exposure to the artificial intelligence

narrative will drive their relative performance.

Fund flows into EM assets have been rising. OCBC analysts

flagging equities saw inflows of $9.9 billion for the week ended

Sept. 25, and bonds reported inflows of $1.3 billion, where

Latin America had the largest inflows of $473.36 million.

Meanwhile, Sri Lanka's sovereign dollar bonds rallied by as

much as 2 cents, Tradeweb data showed, led by the 2025 maturity

ones .

All the maturities have now regained the pre-election losses

when Marxist-leaning candidate Anura Kumara Dissanayake had

claimed Presidential victory.

Investors also awaited interest rate decisions from Colombia

and Jamaica during the day. Poland, Romania and Uganda will also

detail their rates decision this week.

Meanwhile, Poland's flash consumer prices inflation

surpassed expectations. The country's blue-chip index

dropped 1.5%, snapping a five-day winning streak, the worst

performer among its CEE regional peers.

HIGHLIGHTS:

** China's factory, service sectors skid, emboldening

stimulus calls

** Moody's cuts Israel's rating, warns of drop to 'junk'