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India's Nifty 50 hits record high

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Turkey rate decision awaited

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China launches 'punishment' war games around Taiwan

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EM stocks down 0.3%

By Shashwat Chauhan

May 23 (Reuters) - A gauge for emerging market stocks

slipped on Thursday as escalating geopolitical tensions dragged

heavyweight Chinese shares lower, while hawkish minutes from the

U.S. Federal Reserve's last policy meeting kept most currencies

subdued.

MSCI's index for emerging market stocks fell 0.3%,

as benchmark indexes in China closed over 1%

lower.

A furious China launched "punishment" drills around Taiwan

in what it said was a response to "separatist acts", sending up

heavily armed warplanes and staging mock attacks as state media

denounced newly inaugurated President Lai Ching-te.

The Chinese yuan was last at 7.25 per dollar,

touching an over three-week low.

Helping stave off larger losses, India's benchmark Nifty 50

index hit a record high, boosted by financial shares. It

was last up over 1%.

Turkey's lira held steady at 32.22 per dollar

ahead of a central bank rate decision, with the bank expected to

leave its key interest rate unchanged at 50% later in the day.

Currency markets around the world were subdued after minutes

from the Fed's last policy meeting showed officials still had

faith that price pressures would ease at least slowly in coming

months, but doubts emerged whether the current level of interest

rates was high enough to guarantee that outcome.

"The fate of EM currencies depends on how the U.S. is going

to fare. Right now we are back to a soft landing narrative ...

(but) EMs are not out of the woods yet," said Mali Chivakul,

emerging market economist at J. Safra Sarasin Sustainable Asset

Management.

South Africa's rand weakened 0.6% against the dollar,

hitting an over one-week low in the lead-up to national

elections next week.

Russia's rouble slipped 0.2%, on track to

snap an eight-day winning streak.

In Central Eastern Europe, Hungary's forint led

losses with a 0.3% fall against the euro while most stock

markets in the region also traded lower.

Minutes from the Mexican central bank's last policy meeting

and a rate verdict in Chile are among key events expected later

in the day.

HIGHLIGHTS:

** Lebanon's reforms insufficient for recovery, IMF says

** UAE economy grew 4.3% in fourth quarter of 2023

** Polish inflation is not stabilised at target level, says

central banker Tyrowicz

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For RUSSIAN market report, see