By Karin Strohecker

LONDON, Sept 23 (Reuters) - Emerging stocks nudged lower on Friday but were on track for the biggest weekly gains since mid-July while currencies were more mixed as the prospect of very gradual U.S. interest rate rises continued to support assets from developing economies.

Emerging markets breathed a sigh of relief after the Federal Reserve on Wednesday maintained its low interest rate stance and projected a less aggressive rate rise trajectory in 2017 and 2018. This fuelled expectations that ample liquidity was here to stay for now and investors would continue their hunt for yield.

While MSCI's emerging markets benchmark snapped a four day winning streak to soften 0.25 percent on the day, the index was on track for a near 4 percent jump over the week and has soared nearly 16 percent since the start of the year.

"Emerging markets assets will get a bit more support from less tightening in the U.S.," said William Jackson, senior EM economist at Capital Economics, adding that he did not expect the steep gains made by emerging stock markets in July and August to be repeated.

"There's likely to be anticipation ahead of other Fed meetings. That said, there are some more domestic reasons to think the rally might continue as some of the economic data from emerging markets has improved."

Flow data reflected investors' liking of emerging market bonds, with dedicated funds attracting inflows of $1.5 billion in their 12th straight week of gains.

Emerging dollar-bond yield spreads - reflecting the premium investors demand to hold riskier debt over safe-haven U.S. Treasuries - were at the tightest levels in two weeks after having come in by 18 basis points since last Friday.

Meanwhile more supply was coming to the market.

Russia's $1.25 billion dollar-denominated bond is starting to trade after Moscow compiled a bulging order book of $7.5 billion for the issue, showing the country can readily tap global markets in spite of Western sanctions.

Currencies delivered a more mixed performance on the day. Russia's rouble weakened 0.2 percent against the dollar, dragged down by oil prices falling more than 1 percent, but the currency is still on track for solid gains on the week.

Turkey's lira matched that fall as the country's Industry Minister Faruk Ozlu predicted economic growth would be below expectations in the third quarter, reinforcing the government message that the economy has lost some momentum.

Yet South Africa's rand , 0.4 percent stronger on the day, is headed for its best week against the dollar since early April, also underpinned by better-than-expected economic data.

Across central and eastern Europe, both currencies and stock markets suffered, with Polish assets chalking up the biggest losses.

The zloty slipped 0.3 percent against the euro and stocks tumbled 1 percent after Prime Minister Beata Szydlo said she would announce a government reshuffle next week.



Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg



on year

Morgan Stanley Emrg Mkt Indx 919.33 -1.59 -0.17 +15.76

Czech Rep 871.50 -4.37 -0.50 -8.87

Poland 1758.79 -17.43 -0.98 -5.40

Hungary 28251.21 -49.62 -0.18 +18.10

Romania 6990.87 -54.61 -0.78 -0.19

Greece 574.93 +2.78 +0.49 -8.94

Russia 989.73 -12.40 -1.24 +30.74

South Africa 45152.27 -155.31 -0.34 -1.41

Turkey 79632.71 -163.24 -0.20 +11.02

China 3033.79 -8.52 -0.28 -14.28

India 28727.59 -45.54 -0.16 +9.99



Currencies Latest Prev Local Local



close currency currency



% change % change



in 2016

Czech Rep 27.02 27.00 -0.08 -0.08

Poland 4.29 4.28 -0.30 -0.77

Hungary 306.18 305.90 -0.09 +2.76

Romania 4.44 4.45 +0.01 +1.67

Serbia 123.16 123.14 -0.02 -1.37

Russia 63.76 63.67 -0.14 +14.42

Kazakhstan 337.75 337.85 +0.03 +0.81

Ukraine 25.93 25.93 +0.00 -7.63

South Africa 13.57 13.63 +0.42 +13.92

Kenya 101.05 101.10 +0.05 +1.14

Israel 3.76 3.76 -0.03 +3.39

Turkey 2.95 2.94 -0.24 -1.10

China 6.67 6.66 -0.10 -2.67

India 66.67 66.62 -0.07 -0.70

Brazil 3.22 3.22 +0.09 +23.07

Mexico 19.71 19.61 -0.49 -12.87



Debt Index Strip Spd Chg %Rtn Index

Sov'gn Debt EMBIG 354 2 .06 7 72.99 1

All data taken from Reuters at 09:09 GMT. Currency percent change calculated from the daily U.S. close at 2130 GMT.



(Additional reporting by Claire Milhench) ((karin.strohecker@thomsonreuters.com; +442075427262; Reuters Messaging: karin.strohecker.reuters.com@reuters.net))