* China shares rebound from last sessions losses
* Analysts' warn stocks rally may be dead cat bounce
* Currencies capitalize on dollar's weakness
By Susan Mathew
Dec 28 (Reuters) - Emerging market stocks posted strong gains on Friday as investor sentiment was boosted by Wall Street's late rebound in the previous session that helped it sustain Wednesday's dramatic rally, but analysts said risks of a slide remained.
The MSCI index of emerging markets shares was 0.8 percent higher with India and Taiwan stocks leading gains in Asia, up nearly 1 percent each, while Chinese stocks recovered from previous sessions losses.
Stocks in China rose after authorities allowed banks to set up new wealth management firms, which combined with looser monetary policy, implied Chinese stock investors "will no longer have to worry about liquidity" in 2019, Wei Yi, an analyst at Kaiyuan Securities said in a note.
An over 1 percent rise in Russian stocks and South African shares, added to the broader index's gains.
U.S. stocks ended higher on Thursday following steep losses for much of the session, a day after markets globally were supported by the major U.S. indexes posting their biggest daily percentage increases in nearly a decade.
"Pronouncements of bear market averted by emphatic post-Christmas Wall Street rally. But that is at best a distraction, more likely year-end distortion amid thinner liquidity accentuated by short-covering into New Year holidays," said Vishnu Varathan, head of economics & strategy at Mizuho Bank in a note.
"... rather than prematurely rejoicing over a dead bear (and return to a bull market), it may be far more sensible to worry about a dead cat (bounce) that could quickly fizzle and revert to a more prolonged price correction," he said.
Currencies of developing market economies firmed against a weaker dollar with most Asian currencies in the black, and Turkey's lira and South Africa's rand each touching a one-week high.
The MSCI index of emerging market currencies hit its highest in three weeks, up 0.3 percent.
Lingering concerns about slowing global growth after weak data from the United States and China, as well as renewed trade tensions between the two countries pressured the greenback.
Most east European currencies made marginal moves against a stronger euro.
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For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru; editing by David Evans)