EMERGING MARKETS-Emerging stocks at 11-mth high, shrug off China jitters

By Sujata Rao

LONDON, July 27 (Reuters) - Emerging stocks touched 11-month highs on Wednesday, boosted by news of additional Japanese stimulus and shrugging off a sharp drop in mainland shares in China, where fears of a fresh regulatory crackdown are weighing.

Markets are waiting for the outcome of a U.S (Other OTC: UBGXF - news) . Federal Reserve meeting that may signal if the bank expects to raise interest rates this year, while Japan announced an extra dose of economic stimulus ahead of meeting on Friday at which the central bank could ease policy even further.

Emerging stocks tracked their developed market peers higher, with the MSCI (NYSE: MSCI - news) 's main equity benchmark up 0.3 percent, while most emerging currencies firmed slightly against the dollar.

Some nerves were jangled by a 2 percent fall in Shanghai-listed shares, which posted their worst day in six weeks while the Shenzhen index lost 1.6 percent and small caps fell almost 6 percent.

Analysts cited a meeting in Beijing on Tuesday in which officials warned of asset bubbles. The slide also revived memories of last summer's rout that saw Shenzhen stocks slump 45 percent in three months.

The sell-off did not spread to Hong Kong-listed Chinese shares, which rose 0.2 percent to trade just off seven-month highs, while other Asian markets also firmed, focusing on the Japanese stimulus.

William Jackson at Capital Economics said emerging markets were benefiting from "the prospect of continued loose policy by major central banks and also some of the fears that had clouded the market, such as the Brexit vote having a spillover, have eased".

In emerging Europe, Turkish stocks rose half a percent , with tourism-linked companies including Turkish Airlines up more on hopes that a rapproachement with Russia could drive some recovery in slumping tourism numbers.

There are also hopes that Moscow will lift its Turkish food import embargo, developments that could partly offset damage caused by this month's failed coup and subsequent crackdown.

Turkey's lira rose 0.2 percent against the dollar to around 3.03 per dollar.

Commerzbank (Xetra: CBK100 - news) analysts forecast more lira weakening, predicting core inflation to stay around 8 percent even though central bank governor Murat Cetinkaya said on Tuesday that core inflation would continue to moderate.

"(This) means that room for monetary easing is limited. Nevertheless,(the central bank) will continue to ease policy - the governor made this clear yesterday. We see dollar/lira at 3.25 by year-end," Commerzbank added.

Investors were also keeping an eye on two African markets, Nigeria and Egypt, where financial and currency reforms are under way. Nigeria's naira is at record lows after being effectively floated in the past week, but could get some support from Tuesday's 200-basis-point rate rise.

Some also expect a devaluation in Egypt on Thursday when the central bank meets, and news that Cairo is about to agree a loan deal with the International Monetary Fund (IMF) boosted local stocks 3.3 percent .

In eastern Europe, Warsaw stocks fell almost 1 percent, led by Bank Pekao which tumbled almost 5 percent on news Unicredit (EUREX: DE000A163206.EX - news) was mulling selling its entire stake in Poland's No. 2 lender.

For GRAPHIC on emerging market FX performance 2016, see http://link.reuters.com/jus35t

For GRAPHIC on MSCI emerging index performance 2016, see http://link.reuters.com/weh36s

For GRAPHIC on MSCI emerging Europe performance 2016, see http://link.reuters.com/jun28s

For GRAPHIC on MSCI frontier index performance 2016, see http://link.reuters.com/zyh97s

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see ) Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg

on year

Morgan Stanley (Xetra: 885836 - news) Emrg Mkt Indx 873.58 +2.86 +0.33 +10.00

Czech Rep 890.97 +1.55 +0.17 -6.83

Poland 1790.05 -13.91 -0.77 -3.72

Hungary 27898.01 -116.12 -0.41 +16.63

Romania 6690.97 +35.75 +0.54 -4.47

Greece 568.91 +2.91 +0.51 -9.89

Russia 924.29 -0.45 -0.05 +22.09

South Africa 46779.30 -9.02 -0.02 +2.14

Turkey 74440.04 +750.61 +1.02 +3.78

China 2991.12 -59.04 -1.94 -15.49

India 27952.26 -24.26 -0.09 +7.02

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2016

Czech Rep 27.02 27.01 -0.06 -0.09

Poland 4.37 4.36 -0.16 -2.47

Hungary 313.04 312.80 -0.08 +0.51

Romania 4.47 4.46 -0.10 +1.13

Serbia 123.26 123.25 -0.01 -1.45

Russia 65.91 65.96 +0.07 +10.68

Kazakhstan 352.00 353.60 +0.45 -3.27

Ukraine 24.80 24.78 -0.08 -3.42

South Africa 14.28 14.34 +0.42 +8.27

Kenya 101.25 101.20 -0.05 +0.94

Israel 3.84 3.84 +0.03 +1.29

Turkey 3.04 3.04 +0.27 -3.93

China 6.67 6.67 -0.00 -2.66

India 67.16 67.31 +0.22 -1.43

Brazil 3.28 3.28 +0.01 +20.86

Mexico 18.77 18.77 +0.00 -8.51

Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt EMBIG 382 -2 .00 7 53.57 1

All data taken from Reuters at #N/A The record could not be found GMT.

Currency percent change calculated from the daily U.S.

close at 2130 GMT.

(Additional reporting by Claire Milhench; editing by John Stonestreet)