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May 22 (Reuters) – Emerging market stocks gained on Monday as hopes of improved Sino-U.S. relations buoyed equities in China following remarks from U.S. President Joe Biden, while the Turkish lira continued to languish at record lows.

MSCI’s emerging market equities index .MSCIEF was up 0.6% at 0849 GMT, with stocks in mainland China .CSI300 logging similar gains and snapping four straight sessions of losses.

Following a raft of weak data in April which signalled weak consumer demand in the world’s second largest economy and soured sentiment towards China’s stocks, the country’s central bank has vowed to support economic growth.

Also aiding the market mood, U.S. President Joe Biden said he expected a thaw in frosty relations with China “shortly” after strains caused by an incident earlier this year.

The Chinese yuan CNY= gave up early gains to fall 0.3% as China kept its benchmark lending rates unchanged for the ninth month, in line with market expectations.

The Turkish lira TRYTOM=D3 was at a record low of 19.82 against the dollar, having steadily weakened following the outcome of the first round of presidential elections last week.

Incumbent Tayyip Erdogan’s lead over his main rival disappointed investors hoping for an opposition win and a return to orthodox monetary policies.

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Data showed Turkey’s consumer confidence index rose 4.1% to 91.1 points in May, continuing an upward trend ahead of a second round of votes later this month.

“Until the 2nd round of the presidential election, the central bank will certainly try its best to prevent a TRY crash,” said Ulrich Leuchtmann, head of FX and commodity research at Commerzbank, in a note.

“However, it cannot work magic. Even before the second round of voting, a scenario is possible in which the dams burst and the lira takes a depreciation hit.”

Erdogan will attend a meeting in Istanbul on Monday while Sinan Ogan, Turkey’s nationalist presidential candidate who finished third in the initial vote, is expected to announce a decision on him endorsing either Erdogan or his rival Kemal Kilicdaroglu in the runoff vote.

Among central and eastern European currencies, the Polish zloty EURPLN= rose 0.2% against the euro following a slew of economic data.

Polish corporate sector wages rose by an annual 12.1% in April, in line with expectations, while growth in producer prices was below estimates.

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The broader EM currencies index .MIEM00000CUS was largely unchanged, with the dollar =USD steady as U.S. debt ceiling negotiations were set to resume after a setback late last week.

President Joe Biden and House Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling later in the day, after a phone call on Sunday which both sides described as positive.

Elsewhere, the Bank of Israel is expected to hike rates on Monday given high inflation.

For GRAPHIC on emerging market FX performance in 2023, see http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2023, see https://tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets Read full story

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(Reporting by Amruta Khandekar; Editing by Jan Harvey)