EMERGING MARKETS-Stocks slip as virus cases spike, recovery in question

* Rising cases putting reopening economies in question- analyst

* Hungarian forint leads declines among European peers

* Russian stocks underperform markets

* Turkish central bank meeting eyed

By Shreyashi Sanyal

June 25 (Reuters) – Stocks in the developing world fell on Thursday, as coronavirus cases accelerated globally and dimmed hopes of recovery after a dismal economic forecast from the International Monetary Fund.

The MSCI index for emerging-market equities fell 0.6%, after rising nearly 8% this month on hopes that stimulus from central banks and governments globally could help economies swiftly recover from a pandemic-led slump.

Virus infections had record increases in the U.S. states of Florida, Oklahoma and South Carolina on Wednesday, while Australia posted its biggest daily rise in infections in two months.

“Recent spikes in COVID-19 cases in several U.S. states and across the globe is putting the re-opening of economies into question,” said Hussein Sayed, chief market strategist at FXTM.

“Whether we’re seeing a second wave or just a continuation of the first wave, the outbreak may reverse actions taken by governments to re-open their economies, hence curbing hopes of a smooth recovery.”

The IMF said 2020 global output will shrink by 4.9%, compared with a 3.0% contraction predicted in April. China is the only major economy now expected to grow in 2020.

Russian stocks underperformed the market with a 1% fall, after returning from a public holiday on the previous day, belatedly reacting to a fall in oil prices.

The country, which is the third largest coronavirus hot spot in the world, confirmed 7,113 new cases on Thursday, pushing its total to 613,994.

In currencies, the Hungarian forint led declines in eastern and central Europe, extending losses since Tuesday’s surprise interest rate cut by the Hungarian central bank.

Hungary has lost 120,000 to 130,000 jobs due to the pandemic, Prime Minister Viktor Orban’s chief of staff said, while the cabinet still expects the economy to contract by 3% this year.

The South African rand edged lower against the dollar as the country’s finance minister said its budget deficit will be the highest in the post-apartheid era.

Turkey’s central bank is expected to cut interest rates by 25 basis points to 8%, according to a Reuters poll. The lira was flat.

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 CENTRAL EUROPE market report, see

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

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