EMERGING MARKETS-Shares hit 26-month high, FX squalls abate ahead of Yellen testimony

* MSCI EM stocks index hits 26-month high

* Rand sees biggest rise in a month after 7 pct rout

* Polish zloty, Hungarian forint consolidate big gains

* Rouble, Russian stocks rise on oil jump

By Marc Jones

LONDON, July 12 (Reuters) - Emerging markets shares hit 26-month highs on Wednesday and the rand, lira and rouble clawed back some of their recent heavy losses, after more Russia-linked controversy for Donald Trump had weakened the dollar.

It was a third-straight day of gains for MSCI (Frankfurt: 3HM.F - news) 's 24-country EM stocks index as markets from Hong Kong to Poland, as well as recently-hammered Qatar all powered higher.

A jump in oil prices also helped Russian stocks and the rouble shrug off the latest twist in the Trump story as bond yields dipped too.

E-mails showed his eldest son had eagerly agreed to meet with a woman he was told was a Russian government lawyer with damaging information about Hillary Clinton.

South Korea's won, Taiwan (Taiwan OTC: 6549.TWO - news) 's dollar and the Thai baht had all posted their biggest intraday gains in at least a month in Asia trading.

EMEA followed their lead, showing none of the usual caution ahead of a semi-annual Congressional grilling of Federal Reserve chief Janet Yellen later, likely to produce signals on U.S. interest rates and the Fed's plans to shrink its balance sheet.

The rand, which has been battered by political uncertainty in recent weeks, saw its biggest jump in almost a month as it climbed to 13.4525 per dollar.

It also shrugged off a delay to quasi-sovereign utility Eskom's annual results after external auditors found "irregularities".

The lira which has also been hammered along with the rand and rouble was steady, while Poland's zloty and Hungary's forint which have been soaring consolidated the respective 2017 and two-year highs versus the dollar they had hit on Tuesday.

"We had a big move in dollar versus CEE currencies yesterday," said Rabobank emerging markets strategist Piotr Matys.

"Key levels were broken including the zloty at 3.7 (per dollar) so unless Yellen says something particularly hawkish in her testimony later CEE crosses will remain front heavy."

Focus remained on China's credit growth too, as data showed banks extended 1.54 trillion yuan ($226.9 billion) in net new yuan loans in June, well above analysts' expectations.

The prospect of a default by Venezuela also seems to mounting. Rating agency S&P Global (Frankfurt: 851710 - news) cut its rating on the strained South American country to CCC-, the last rung before default late on Tuesday.

For GRAPHIC on emerging market FX performance 2017, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2017, see http://tmsnrt.rs/2dZbdP5

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see) (Reporting by Marc Jones; Editing by Toby Chopra)