* Currencies sag as dollar gains on Brexit worries
* Stocks rise on ECB, Fed rate cut bets
* Central banks meet in Russia, Turkey and Hungary
By Agamoni Ghosh
July 23 (Reuters) – Emerging-market stocks rose on Tuesday amid expectations some of the world’s major central banks would cut interest rates soon, while gains by the dollar weakened developing-world currencies. Central bankers in South Korea and South Africa cut rates last week. The Russian and Turkish central banks are expected to follow suit later this week.
But markets are focusing on the European Central Bank, which is expected to cut a key rate by 10 basis points on Thursday. And next week the Federal Reserve is forecast to cut its benchmark rate by 25 bps.
“Markets are in a consolidative mode ahead of the European Central Bank rate review where policymakers will reaffirm their dovish tones and convince markets that it has sufficient tools to address the ongoing slowdown,” said analysts from DBS in a note.
MSCI’s index for emerging-market stocks climbed 0.2% higher as mainland Chinese and Hong Kong stocks edged up. The new Nasdaq-style STAR Market continued to attract attention.
Among other indices, South Korea’s Kospi closed 0.4% higher. Johannesburg and Istanbul markets gained nearly 0.6%.
Developing-world currencies were subdued against the dollar, which rose as sterling fell on worries of a disorderly Brexit if Boris Johnson becomes Britain’s prime minister, as expected.
South Korea’s won, Turkey’s lira and South Africa’s rand all fell. Russia’s rouble outperformed, gaining 0.2% on higher oil prices.
In emerging Europe, Hungary’s forint weakened against the euro before a central bank meeting at 12:00 GMT where officials are expected to leave rates unchanged.
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For RUSSIAN market report, see (Reporting by Agamoni Ghosh in Bengaluru, editing by Larry King)