June 1 (Reuters) – Emerging markets made a strong start to June, with stocks rising to more than three-month highs on Tuesday while currencies moved further up in record territory.

May factory activity data from several emerging market countries showed a mixed bag, with manufacturing activity in South Korea and Russia expanding while slowing in India and contracting in Turkey.

In China, factory activity expanded at the fastest pace this year, but inflation pressure crimped production of some companies.

MSCI’s index of EM stocks rose 0.7% with most Asian heavyweights in the black, while those in Turkey, South Africa and Russia gained between 0.2% and 1.3%, with Moscow’s index hitting new highs. U.S. stock futures, meanwhile, indicated a higher open after an extended weekend.

“Although global stocks are now around 20% above pre-pandemic highs, a combination of strong earnings growth and reasonable valuations relative to still-low bond yields points to further upside for stocks,” said Mark Haefele, chief Investment officer at UBS Global Wealth Management.

China stocks ended higher. Married Chinese couples may have up to three children, China said on Monday, in a major shift which analysts say could support the country’s long-term economic growth.

The EM currencies index rose up to 0.13%, heading for an eighth consecutive session of gain – the longest run in seven months.

South Africa’s rand moved closer to its highest level in more than two years, while Russia’s rouble rose 0.4% to hit a 2-1/2-month peak.

Turkey’s lira moved further away from record lows. Turkey is extending its lira bank deposits’ withholding tax support to June and July, Treasury sources said, having announced a cut on the withholding tax on longer-term bank deposits last year.

Turkey further eased measures meant to curb coronavirus infections on Monday including partially lifting a weekend lockdown and opening restaurants to a limited number of guests.

For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX

(Reporting by Susan Mathew in Bengaluru; Editing by Subhranshu Sahu)