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EMERGING MARKETS-Stocks, currencies up this week, but virus worries persist

June 26 (Reuters) - Emerging market stocks and currencies were set on Friday to end the week with modest gains, as concerns about a surge in coronavirus cases continued to weigh on hopes of a swift economic recovery.

The MSCI’s index for emerging markets stocks and its currencies counterpart struggled for direction, but both indexes are currently set to post gains of about 0.4% for the week.

Coronavirus cases continued to rise across the United States by at least 39,818 on Thursday, the largest one-day increase of the pandemic.

Analysts say market participants have assumed a second coronavirus wave and renewed lockdowns will have limited impact because, if curbs resume, it could heighten the possibility of more stimulus for economies.

Still, caution prevailed in the markets as the safe haven U.S. dollar and gold prices rose.

“No clear picture is emerging on the FX markets at the close of this week. As the euphoria that dominated the beginning of the week seems to have evaporated and the dollar is principally more in demand,” analysts at Commerzbank wrote in a client note.

The high-yielding South African rand slipped 0.5% against the dollar, while the Russian rouble dipped 0.2%.

The Turkish lira was flat after rallying in the previous session following the central bank’s unexpected decision to halt a nearly year-long easing cycle on Thursday, citing upward pressure on inflation through the coronavirus pandemic. The lira has fallen 13% this year.

In Hungary, Deputy Governor Barnabas Virag said the Hungarian central bank may cut its base rate by another 15 basis points in July, but that was as far as it would go, adding that market pricing of further aggressive rate easing was exaggerated.

The Hungarian forint weakened 0.2% against the euro, while other central and eastern European counterparts including currencies in the Czech Republic and Poland also dipped.

For GRAPHIC on emerging market FX performance in 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, 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 Shreyashi Sanyal in Bengaluru; Editing by Mark Potter)

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