June 25, 2019 / 9:17 AM / a month ago

EMERGING MARKETS-Trade angst hits emerging stocks; dollar dip supports FX

* Chinese stocks end six-day run of gains

* Moscow-listed shares fall, tracking oil prices

* Forint weakens ahead of Hungary c.bank meeting

By Sruthi Shankar

June 25 (Reuters) - Emerging stock markets fell on Tuesday, led by Chinese shares amid uncertainty over the upcoming Trump-Xi meeting at the G20 Summit, though currencies were bolstered by a drop in the U.S. dollar.

Chinese stocks snapped a six-day winning streak, closing down nearly a percent after a senior U.S. official said late Monday that U.S. President Donald Trump was “comfortable with any outcome” in the trade talks with President Xi Jinping.

“The Trump-Xi meeting holds the potential to rock markets, depending on how much the outcome deviates from market expectations,” said Han Tan, market analyst at online forex trading broker FXTM.

“At best, markets can hope for a marked resumption of trade talks. At worst, both leaders walk away to underscore the tremendous gulf that still remains in the U.S.-China standoff.”

Stock markets in Hong Kong, Taiwan and South Korea were all lower, while Moscow-listed shares fell 0.6%, dragged down by banking and oil stocks.

Oil prices slipped on concerns about the outlook for demand, but were supported by Washington’s new sanctions on Iran.

Tensions in the Middle East were a focus after Tehran said the sanctions decision had closed the path to diplomacy.

The anxiety in markets drove investors to safer bets including gold, the Swiss franc and the yen .

The U.S. dollar hit a three-month low against the euro, dented by the prospect of monetary easing by the Federal Reserve, which in turn has supported developing world currencies in the recent weeks.

Russia’s rouble held steady and South Africa’s rand jumped 0.6%.

However, the Turkish lira was set to give back all of all Monday’s gains that were made in the wake of the main opposition party’s victory in Istanbul’s re-run mayoral election.

Trump is set to hold talks with Turkish President Tayyip Erdogan at this week’s summit amid a standoff between Ankara and Washington over Turkey’s purchase of Russian missile defences.

The Thai baht pulled back slightly from its six-year peak as factory output in May fell more than expected. The baht is the best performing Asian currency, thanks to its relative economic stability and current account surplus.

Its central bank is expected to keep borrowing costs unchanged at a policy meeting on Wednesday.

In eastern Europe, Hungary’s forint weakened against the euro ahead of its central bank meeting where policymakers are expected to leave interest rates unchanged.

All 15 analysts forecast the base rate to remain at 0.9%, according to a Reuters poll, as the prospect of monetary tightening dimmed after the European Central Bank’s about-face and the Fed ‘s signalling possible rate cuts over the rest of the year.

For GRAPHIC on emerging market FX performance 2019, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2019, see tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Sruthi Shankar in Bengaluru Editing by Andrew Heavens)

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