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IMF approves $1.1 bln funding for Pakistan, says IMF

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China factory, services activity slows in April

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Czech, Hungarian economies post faster growth in Q1

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EM stocks and currencies off 0.1%

By Bansari Mayur Kamdar

April 30 (Reuters) - Emerging market stocks slipped on

Tuesday but were on track for monthly gains, while currencies

faced a monthly decline against the dollar as investors

reassessed the Federal Reserve's interest rate path and

geopolitical tension drove a rush to safety.

The MSCI index for emerging market stocks eased

0.1% by 0850 GMT, but was set for its third monthly advance

supported by a recovery in heavyweight China stocks.

Hong Kong's Hang Seng extended gains for its seventh

straight session ahead of the May 1 holiday, while mainland

China stocks closed marginally lower.

All three indexes were poised for their third straight

monthly gain supported by Beijing's efforts to boost shareholder

returns and strong corporate earnings.

Markets were unruffled by China's April official factory

survey on Tuesday that showed manufacturing and services

activity expanded at a slower pace in April.

Emerging market currencies faced their

second monthly decline as the dollar rallied on rising safe

haven demand spurred by Iran-Israel tensions and investors

reducing bets of early Fed rate easing after sticky U.S.

inflation data.

The Fed begins its two-day monetary policy meeting on

Tuesday and is expected to keep rates unchanged.

Meanwhile, data showed economic recovery in central and

eastern Europe, with Hungary's economy expanding in the first

quarter while Czech gross domestic product increased at its

fastest quarterly rate in two years.

This could provide support to policymakers in both

countries, where signals point to a possible slowdown in the

interest rate easing begun last year in response to concerns

over currency weakness.

Hungary's forint and the Czech crown

inched higher against the euro, while the Polish zloty

slipped.

Data showed inflation in Poland rose to 2.4% year-over-year

in April after decelerating to 2.0% in the previous month. This

was lower than the anticipated 2.45% advance.

"CPI is likely to rise further in the coming months on the

back of changes in the anti-inflationary measures... the bar to

lower interest rates is still set fairly high," said Piotr

Matys, senior FX analyst at In Touch Capital Markets.

Rate-setter Ludwik Kotecki said "very high" core inflation

in Poland means the central bank cannot ease monetary policy

yet.

The Israeli shekel inched 0.4% up against the dollar

but headed for its second month down after direct strikes

between Iran and Israel raised concerns of an escalation of the

middle east conflict beyond Gaza.

The executive board of the International Monetary Fund

approved $1.1 billion in funding for Pakistan on Monday, the

agency said in a statement.

Local emerging market bonds index fell 2.2% this month,

according to JP Morgan data.

HIGHLIGHTS:

** Bank of Korea rules out immediate gold buying

** Thai factory output falls for 18th consecutive month

** Taiwan Q1 preliminary GDP hits 3-year high on robust AI

demand