EMERGING MARKETS-EM stocks gain as drop in new virus cases boosts confidence

* Chinese equities end higher for seventh straight session

* Drop in virus cases raises hopes outbreak could be peaking

* South African rand firms despite weak unemployment data

* Russia's rouble tracks oil prices higher

* Turkish firm Aselsan soars after quarterly results

By Sagarika Jaisinghani

Feb 12 (Reuters) - Emerging market stocks rose for the second straight session on Wednesday, as a drop in new coronavirus cases raised hopes that the fallout of the epidemic on the world's second biggest economy might not be as bad as previously feared.

On Wednesday, China reported its lowest number of new cases of the flu-like virus since late January, lending weight to a prediction from its senior medical adviser that the outbreak, which has now killed over 1,100 people, could be over by April.

A basket of emerging market stocks was up 0.6%, with Chinese equities ending higher for the seventh day in a row. Shanghai's main index has now recovered most of its losses from Feb. 3, when it slumped nearly 8% on reopening after the extended Lunar New Year holidays.

"Unless there's a real shocker to the downside, like if we get catastrophic data from China, markets are just going to keep on going higher because there's a lot of cash in the system," said Stephen Innes, chief market strategist at AxiCorp.

Demand for riskier assets has stabilised this week after see-sawing since late January, as China's central bank stepped in to cushion the blow of the outbreak on factory activity and consumer spending. Broader confidence in economic growth has also sent global equities back near record highs.

An index of emerging market currencies firmed 0.1% on Wednesday and was on track to gain for the third straight session.

The South African rand, among the highest yielding currencies in the developing world, rose about 0.4% to its highest level in nearly a week, despite data showing unemployment remained at an 11-year peak in the fourth quarter.

Russia's rouble added about half a percent, tracking oil prices higher, while equities in the country were lifted by a 2.3% gain for Gazprom.

Turkey's lira eased slightly to the dollar, but the stock index jumped over 1%. Aerospace and defence company Aselsan soared 13% to its highest level in over a year after reporting a strong quarterly profit.

Currencies in central and eastern European economies, including Hungary and Poland, were relatively unchanged versus the euro.

For GRAPHIC on emerging market FX performance in 2020, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see https://tmsnrt.rs/2OusNdX

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For CENTRAL EUROPE market report, see

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For RUSSIAN market report, see (Reporting by Sagarika Jaisinghani in Bengaluru; editing by Philippa Fletcher)