(Updated at 0905 GMT)

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Banks lift India stocks to record highs

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Polish interest rate decision due at 1200 GMT

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Pakistan met all requirements for IMF deal, official says

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Stocks up 0.8%, FX flat

By Johann M Cherian

July 3 (Reuters) - Equities in most emerging markets

rose on Wednesday, with benchmark indexes in India and Pakistan

trading at record highs, while investors cheered signs of

disinflation in Turkey and awaited a monetary policy decision in

Poland.

MSCI's index tracking emerging market equities

added 0.8% to trade at its highest in over a week, while a

currencies gauge was muted against the dollar.

Turkey's main stock index rose 1% and banking stocks

added 2.5% after data showed inflation rose 71.6% in

June on an annual basis, compared with expectations of a

increase of 72.6%, according to economists polled by Reuters.

The lira was little changed at 32.56 to the dollar.

"Although improvement in underlying price dynamics is

already underway, solving the inflation problem requires time

and discipline" said Bartosz Sawicki, market analyst at

Conotoxia fintech.

"A return to single-digit inflation before 2027 seems highly

unlikely. In the short term, exchange rate dynamics will remain

unfavourable."

The lira had initially dropped to record lows as investor

confidence ebbed against the backdrop of inflation that hit its

highest level since November 2022 in May as a result of

unorthodox monetary policy.

In focus will be a monetary policy decision out of Poland.

The zloty inched up 0.2% ahead of the decision due at

1200 GMT, where the regulator is widely expected to leave

borrowing costs unchanged at 5.75%.

The currency has been among better performers among central

and eastern European peers, up nearly 1% year-to-date after the

domestic central bank paused interest rate cuts on fears of

price pressures flaring up.

Most other currencies in the region were roughly flat ahead

of France's second round of elections.

In south Asia, India's BSE Sensex stocks index

climbed 0.5% to hit a record high, underpinned by HDFC Bank

and the expectation the private lender's weight could

be increased in Morgan Stanley's MSCI indexes.

Pakistan's official said it has met all the requirements of

the International Monetary Fund for securing a bailout deal of

more than $6 billion, sending the country's main stock index

up 1% to an all-time high.

Meanwhile, China's blue chip stocks closed 0.2%

lower after services activity expanded at the slowest pace in

eight months and confidence hit a four year low in June, with

investors hoping for more economic stimulus.

South Africa's rand strengthened 0.7% and the local

all-share index added 1.3% ahead of the swearing-in of

President Cyril Ramaphosa's new unity government.

Zambia's kwacha rose 0.9% against the euro. The

local finance ministry said the World Bank has approved a $208

million grant to help address the social and economic impact of

drought.

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