EMERGING MARKETS-EM stocks kick off November higher with rate decisions in focus

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EM stocks up 0.58%, FX down 0.13%

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Polish interest rate decision on Nov 5

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Czech rate decision due Nov 6

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Polish manufacturing shows signs of stabilisation in October

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Hungary's PMI drops to 51.0 in October

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Hungary's Orban to meet President Trump on Nov 7

By Nikhil Sharma

Nov 3 (Reuters) -

Emerging market equities started the new month higher on Monday after logging modest gains in October, while currencies stayed subdued as investors looked ahead to the week's key interest rate decisions from the region.

MSCI's index for regional equities rose 0.6% after two consecutive days of losses. The index finished October with a monthly gain of 0.6%, primarily driven by anticipation of a U.S.-China trade deal and a Federal Reserve interest rate cut.

Meanwhile, a parallel index of EM currencies slipped 0.1%, while it stayed mostly flat last month.

In Central and Eastern Europe, the Polish zloty weakened 0.1% on the growing possibility of a rate cut on Wednesday after last week's soft inflation data.

The currency was on track for a fifth straight daily decline - its longest streak in more than a year, while the main stock index jumped 1%.

The National Bank of Poland (NBP) has cut rates by a cumulative 125 basis points in 2025, and its chief, Adam Glapinski, has signalled scope for further easing, though he has been noncommittal about a move in November.

Fresh data showed Poland's manufacturing sector experienced its slowest decline in six months in October, while Czech manufacturing activity in October declined at the sharpest rate since January, as output and new orders remained in a downturn, and employment shrank.

The Czech crown struggled to find direction, and Prague equities also traded in tight ranges.

"The weak manufacturing PMIs out of Emerging Europe in October, at face value, signal further difficulties for the region's industrial sectors," analysts at Capital Economics said in a note, but acknowledged that the data would do little to alter expectations for upcoming monetary policy decisions.

Investors also awaited Thursday's Czech National Bank (CNB) rate decision, with the consensus expecting rates to remain unchanged as wage pressures and looser fiscal policy keep policymakers cautious about further easing.

An election win for Andrej Babis' populist ANO party has also strengthened the probability for further easing. The party has pledged to raise public spending, boost pensions and cut taxes - measures that could, in turn, stoke inflation and widen the country's fiscal deficit.

Babis-led ANO is expected to sign a coalition agreement with the eurosceptic Motorists party and the far-right, anti-European Union and anti-NATO SPD party later on Monday. Babis aims to form a government by mid-December.

The Hungarian forint rose 0.24% and Budapest stocks added 0.1%. Manufacturing activity dropped to 51.0 in October from a revised 51.6 in September, signalling a slowdown in growth while remaining in expansion territory.

The country is gearing up for April elections, and most polls favour the new centre-right opposition party Tisza, led by Peter Magyar, over Prime Minister Viktor Orban's Hungarian Civic Alliance.

Attention is also on Orban's expected Friday meeting with U.S. President Donald Trump, as the prime minister seeks an exemption from U.S. sanctions on Russian oil that threaten Hungary's reliance on crude from Moscow.

Most emerging Asian markets maintained a strong footing on Monday, with South Korea's Kospi surging 2.7% to hit a record high, boosted by gains in technology stocks.

Elsewhere, Nigeria's dollar bonds edged lower after Trump on Sunday talked of potential U.S. air strikes on the country to stop what he called the killing of large numbers of Christians in the West African country.

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Nikhil Sharma in Bengaluru; Editing by Kate Mayberry)