EMERGING MARKETS-Shares rise as Asian tech recovers, Iran developments in focus

By Ragini Mathur

Nov 2 (Reuters) - Emerging-market stocks rose on Monday, lifted by gains in Asian markets, while currencies were little changed as investors assessed manufacturing data, developments in Iran and the approaching US midterm elections.

MSCI's global emerging-market equity index .MSCIEF rose 0.5%, while its currency index .MIEM00000CUS was little changed.

The equity benchmark was recovering from its steepest monthly decline since March 2026, when markets were shaken by the outbreak of the US-Israeli war with Iran.

Technology-heavy markets were among the worst performers in October as investors sought clearer evidence that surging spending on artificial intelligence would generate sustainable returns.

Fresh manufacturing surveys showed slower activity in China, Japan, South Korea and Taiwan, suggesting the impact of the Iran conflict may be beginning to offset robust global demand for chips and AI-related products.

South Korean shares .KS11 rose 2.2%, supported by dip-buying in technology stocks.

China's blue-chip CSI 300 index .CSI300 gained 0.8% after reports that the central bank and securities regulator would meet brokerages and fund managers to discuss market-support measures, including lending for share buybacks and stock purchases.

In emerging Europe, manufacturing data painted a more resilient picture.

Poland's factory sector stabilised in October, ending nearly 18 months of contraction, while Czech manufacturing expanded at its fastest pace since February 2022.

Hungary's seasonally adjusted PMI eased to 53.1 in October from a revised 53.3 in September.

Regional stocks were mixed. Poland's WIG .WIG fell 0.2%, while Hungary's BUX .BUX and Czech shares .PX gained 0.5% and 0.3%, respectively.

Currencies weakened against the euro, with the Polish zloty down 0.4% and the Hungarian forint losing 0.3%.

Investors are also looking ahead to Polish and Czech central bank policy decisions later this week.

"The combination of rising energy prices and a stronger dollar globally, alongside generally dovish central banks within the CEE region, will continue to exert pressure on local currencies," said Frantisek Taborsky, EMEA FX and fixed-income strategist at ING.

With US midterm elections due on Tuesday, investors were also watching for signals on Washington's approach to Iran.

Iranian negotiators held a third consecutive day of talks with Qatari mediators in Doha on Sunday, according to an official briefed on the discussions. US President Donald Trump said Washington would not launch new attacks on Iran before the elections, though he did not rule out military action afterwards.

Oil prices nevertheless fell more than 3% on Monday.

Elsewhere, Turkey's manufacturing sector contracted in October at its fastest pace since June as steeper declines in output and new orders weighed on activity.

Turkey's main stock index .XU100 fell 0.5%, extending a difficult run after losing about 10% in October. The decline followed MSCI's decision to freeze certain index changes for Turkish equities and its warning that Turkey could face a downgrade from emerging-market status if sufficient progress is not made by June 2027.

Turkish inflation data due on Tuesday will be closely watched.

In India, the market regulator has recommended that the government scrap the long-term capital gains tax on foreign investors, two sources with direct knowledge of the matter said, as the country seeks to reinvigorate its equity market.

India's benchmark equity index Nifty 50 .NSEI and the Sensex .BSESN both rose 1.2%.

HIGHLIGHTS:

** China's big banks post fastest quarterly profit growth in years as margins stabilise

** South Korea's Lee vows to make bold AI investment in record budget push

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