*

EM debt swept up in global bond sell-off

*

Alibaba's ( BABA ) HK shares surge after it unveils reasoning model

*

Goldman Sachs raises EM's target on AI-driven China rally

*

ECB rate decision at 1315 GMT, Turkey rate decision also

awaited

By Shashwat Chauhan

March 6 (Reuters) - An index for emerging markets stocks

jumped on Thursday, with Chinese shares rallying on hints from

Beijing of new policy support, while U.S. President Donald

Trump's decision to exempt some automakers from tariffs for a

month provided some relief.

Hong Kong's Hang Seng touched its highest level since

February 2022, while Chinese blue-chips closed 1.4%

higher a day after Beijing unlocked more fiscal stimulus at the

annual meeting of China's parliament, promising greater efforts

to support consumption.

A stand-out was Hong Kong-listed shares of Alibaba Group ( BABA )

, which jumped 8.4% following the release of a new

reasoning model that the company said was on par with global hit

DeepSeek's R1.

Globally, investors felt a degree of relief after the White

House said on Wednesday Trump would exempt automakers from his

punishing 25% tariffs on Canada and Mexico for one month as long

as they comply with existing free trade rules.

"What is remarkable is not so much the postponement of the

tariffs by a month - even if this did cause noticeable relief on

the markets," Commerzbank economists said in a note.

"What is more important is that President Trump apparently

intends to remain firm on the matter."

That spurred a rally on Wall Street overnight, with the S&P

500 closing more than 1% higher.

MSCI's index for EM equities jumped 1.3%, with a

0.8% advance in beaten down Indian shares also lending a

hand.

Goldman Sachs raised its target price for emerging markets

stocks, projecting that the AI-powered rally in Chinese equities

could boost other markets as well.

The currencies index, meanwhile, edged 0.1%

higher.

In emerging Europe, Hungary's forint led losses

against the euro as markets turned their focus to a European

Central Bank (ECB) interest rate decision at 1315 GMT, with

consensus tilted towards another rate cut.

Turkey's lira was last trading at 36.45 per

dollar ahead of a local rate decision, with the central bank

widely expected to ease its main lending rate by

250 basis-points.

Equities in the region built on firm gains seen in the last

session, with the Polish benchmark jumping 0.9% after a

3.7% rise on Wednesday.

Debt markets, meanwhile, showed a different picture with EM

debt also caught in the maelstrom of the global bond selloff, as

international bonds from Egypt to Romania and Nigeria were down

around 5-7 cents.

German bonds were at the forefront of the selloff, with

long-dated maturities seeing their biggest sell-off in decades

as the parties in talks to form Germany's new government agreed

to try to loosen fiscal rules.

HIGHLIGHTS:

** After Trump's tariffs, Mexico seeks Asian and European

crude oil buyers

** Malaysia central bank keeps key rate at 3%, as expected

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For RUSSIAN market report, see