EMERGING MARKETS-Stocks rise with Fed on the radar, S.African gold miners falter

* U.S. Fed to start two-day policy meeting

* S.African miners falter as gold prices halt rally

* Moderna, Pfizer start COVID-19 vaccine trials

* EM currencies pressured as dollar bounces

By Shreyashi Sanyal

July 28 (Reuters) – Developing world stocks climbed on Tuesday, with rising bets of a dovish stance from the U.S. Federal Reserve to support the world’s biggest economy, while South African gold miners slipped as prices of precious metal retreated from record highs.

Markets are anticipating a dovish stance from the Fed as it gears up for its two-day policy meeting starting on Tuesday, while Washington prepares to hammer out a $1 trillion coronavirus aid package.

“Even if tomorrow is unlikely to be the right moment for a more expansionary monetary policy approach, the Fed will no doubt sound prepared for further easing,” said Esther Reichelt, an FX & emerging markets analyst at Commerzbank.

The upward momentum in stocks was also supported by Moderna Inc and Pfizer Inc’s launches of two 30,000-subject trials of COVID-19 vaccines on Monday that could clear the way for regulatory approval and widespread use by the end of this year.

The MSCI’s index for emerging market equities gained 0.8%, rising for the second straight day with most gains made in Asian markets.

A recent rally in the precious metal market stalled, with gold prices scaling back from record highs against a strengthening dollar.

Gold miners in South Africa, including Gold Fields Limited , AngloGold Ashanti and Sibanye Stillwater , fell between 3% and 5%.

South Africa’s main stock index also declined, with local investors focusing more on offshore events, despite the International Monetary Fund’s approval of $4.3 billion in emergency financing for South Africa on Monday, to help address the challenges of the coronavirus pandemic.

As the greenback crept higher, most emerging market currencies slipped, with the Russian rouble, Turkish lira and South African rand weakening between 0.5% and 0.6%.

Turkey’s BDDK banking watchdog said it will exempt international development banks from some restrictions on access to lira liquidity.

The international developments banks that open a lira account with domestic banks will be allowed to conduct swaps transactions involving buying lira with the Development Investment Bank of Turkey, and in the FX swap market at the Istanbul bourse.

Currencies in central and eastern Europe, including Hungary , Poland, Romania and the Czech Republic, were mostly flat against the euro.

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

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For RUSSIAN market report, see (Reporting by Shreyashi Sanyal in Bengaluru, editing by Ed Osmond)

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