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Central Europe's manufacturing decline deepens in April

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Hong Kong central bank keeps key rate unchanged

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Czech crown subdued ahead of interest rate decision

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EM stocks up 0.5%, currencies add 0.1%

By Bansari Mayur Kamdar

May 2 (Reuters) - Emerging market stocks rose on

Thursday, with many regional bourses returning from a mid-week

holiday and boosted by a less hawkish tone from the U.S. Federal

Reserve than feared, while Hong Kong's Hang Seng index rose for

an eighth straight session.

The MSCI index for emerging market stocks added

0.5%, while currencies climbed 0.1% by 0834 GMT,

tracking the global markets rally as Fed chair Jerome Powell's

characterization of rate hikes as "unlikely" cheered investors.

The Hang Seng rose 2.5%, kicking off May on an upbeat

note after the Labor Day holiday, led by gains in technology,

property and financial stocks.

Beijing's vow earlier this week to step up economic support

with prudent monetary and proactive fiscal policies also helped

underpin sentiment.

The Hong Kong Monetary Authority kept its base rate charged

through the overnight discount window unchanged at 5.75%,

tracking the Fed's decision to keep rates steady.

Mainland China markets are closed for holidays from May 1-3.

Among currencies, the Hungarian forint climbed

0.4% against the euro, outpacing central and eastern European

peers.

Data showed CEE manufacturers suffered in April, with a

decline in factory activity deepening in Poland and the Czech

Republic and Hungary's outlook softening.

The Czech crown was nearly flat ahead of an

interest rate decision, where the Czech National Bank (CNB) is

likely to deliver its third straight 50-basis-point cut, while

Poland's zloty slipped 0.2% against the euro.

"The weak set of manufacturing PMIs out of Central and

Eastern Europe for April suggest that industrial sectors

remained a drag on the regional recovery at the start of Q2,"

said Nicholas Farr, emerging Europe economist at Capital

Economics.

The Russian rouble advanced to 92.08 from 93

per dollar, while the South African rand gained 0.3%.

Data showed activity in Russia's manufacturing sector grew

in April at the slowest rate in three months.

The Turkish lira inched up against a softer

dollar, unruffled by a PMI survey showing Turkish factory

activity fell back into contraction territory in April.

"In Turkey and Russia, the PMIs brought further evidence

that price pressures remain intense," Farr added.

Elsewhere in emerging markets, South Korea unveiled

guidelines for companies participating in a government programme

aimed at enhancing shareholder value.

Ratings agency Moody's revised Brazil's outlook to positive

from stable on Wednesday, citing stronger economic growth while

maintaining the Ba2 credit rating for the country.

Growth in India's manufacturing sector slowed marginally in

April but remained robust thanks to strong demand, a survey

showed.

HIGHLIGHTS:

** Latin America's 7 largest economies to grow 1.4% this

year, OECD forecasts

** India cenbank's FX intervention eases as conditions turn

favourable for rupee