EMERGING MARKETS-Emerging stocks hit one-week high, Turkey assets fall

By Karin Strohecker

LONDON, May 25 (Reuters) - Emerging stocks surged on Wednesday, tracking gains on Western markets for their biggest daily rise in eight weeks, though currencies broadly fell, with the Turkish lira slipping from two-week highs.

MSCI (NYSE: MSCI - news) 's emerging market index jumped 1.6 percent to a one-week high, with Asian and European bourses booking solid gains and Russian dollar-stocks up more than 2 percent.

Upbeat U.S (Other OTC: UBGXF - news) . home sales, coming on the heels of a raft of positive data, reinforced investors' positive view on the health of the world's largest economy, driving U.S. equities sharply higher overnight and pushing oil prices close to $50 per barrel.

But Turkish assets got a reality check after sharp gains following the unveiling of a new cabinet by Prime Minister Binali Yildirim. This confirmed key members of the economic management team including Deputy Prime Minister Mehmet Simsek, favoured by foreign investors as a reformer.

"The market welcomed Simsek but my concerns are first he has been in a high profile position for a while and made the right noises but hasn't been able to push through major reforms," said William Jackson, senior economist at Capital Economics.

"The rest of the cabinet seems to be (President Tayyip) Erdogan loyalists and the new PM seems more malleable to Erdogan's desires."

Turkish stocks slipped 0.5 percent and the lira weakened 0.2 percent against the dollar. Finance Minister Naci Agbal, reappointed to the new cabinet, told Reuters in an interview that a presidential system would make it easier for the government to take decisions, pledging to be "swift and bold" on economic policy.

Other emerging currencies fared little better, with South Africa's rand slipping 0.4 percent and Russia's rouble trading flat as the hovering of the dollar close to an eight-week high took its toll.

Central European bourses rose, with Polish stocks jumping 1.3 percent to a one-week high.

In the Czech Republic, President Milos Zeman officially named his long-time ally and economic adviser Jiri Rusnok as the next central bank governor, putting him in a position to lead debate on the expected exit next year from a crown cap regime.

Nigerian dollar/naira non-deliverable forwards (NDFs) gained across the curve - indicating mounting pressure for a devaluation - after the central bank said on Tuesday it would adopt a flexible foreign exchange rate regime in a policy U-turn .

However, there was uncertainty over how the change from a de facto naira peg to the dollar would be implemented, as the central bank plans to publish details only in a few days.

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 800.90 +12.91 +1.64 +0.85

Czech Rep 886.38 +10.16 +1.16 -7.31

Poland 1854.06 +22.91 +1.25 -0.27

Hungary 26767.45 +55.78 +0.21 +11.90

Romania 6417.77 +11.95 +0.19 -8.37

Greece 646.31 +4.23 +0.66 +2.37

Russia 912.29 +20.81 +2.33 +20.51

South Africa 47638.66 +604.89 +1.29 +4.02

Turkey 79157.08 -277.52 -0.35 +10.36

China 2815.28 -6.39 -0.23 -20.45

India 25882.73 +577.26 +2.28 -0.90

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2016

Czech Rep 27.03 27.02 -0.03 -0.10

Poland 4.42 4.42 +0.01 -3.66

Hungary 314.70 314.94 +0.08 -0.02

Romania 4.50 4.51 +0.15 +0.44

Serbia 122.76 122.76 +0.00 -1.05

Russia 65.87 65.97 +0.15 +10.75

Kazakhstan 336.06 335.94 -0.04 +1.32

Ukraine 25.09 25.11 +0.08 -4.54

South Africa 15.68 15.64 -0.25 -1.41

Kenya 100.55 100.70 +0.15 +1.64

Israel 3.86 3.85 -0.22 +0.79

Turkey 2.94 2.94 -0.08 -0.94

China 6.56 6.56 -0.10 -1.06

India 67.35 67.62 +0.41 -1.70

Brazil 3.57 3.57 +0.08 +10.99

Mexico 18.44 18.47 +0.20 -6.86

Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt EMBIG 417 -2 .02 7 15.54 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 Sujata Rao; Editing by Gareth Jones)