By Karin Strohecker LONDON, Aug 8 (Reuters) - Emerging stocks rose to one-year highs on Monday and currencies strengthened as momentum from Friday's better-than-expected U.S. jobs data helped investors to shrug off weak Chinese trade numbers.
MSCI's emerging index jumped 1 percent, with stocks across Asia as well as in Turkey, Russia and South Africa chalking up solid gains after the U.S. employment reading beat expectations for the second straight month, bolstering expectations of faster economic growth.
Prospects for a rate hike from the U.S. Federal Reserve, were tempered by Fed board member Jerome Powell, who warned of prolonged slow growth that could require lower rates for longer .
That added up to a positive backdrop for emerging markets, said UBS strategist Manik Narain.
"That underscores that this might be a positive environment for EM where the global economy is holding up, led by the U.S., but at the same time, rates are not an immediate threat for emerging markets," said Narain.
He warned a significant slowdown from China could change that dynamic.
Data from Beijing showed China's exports and imports fell more sharply than expected in July, though mainland Chinese equities shrugged off the numbers, jumping 1 percent.
"Most of the miss in the Chinese data was coming from prices rather than volumes. Last week, Chinese PMIs indicated that broadly the economy is in a holding pattern right now. It's not going through a significant slowdown," said Narain.
On currency markets, Turkey's lira gained 0.3 percent after ratings agency Moody's said a review on the sovereign remained ongoing, while July's failed coup was likely to exacerbate existing challenges.
Markets had feared Moody's might cut Ankara's sovereign rating to junk, which would force some investors to reduce holdings of Turkish assets.
Turkey's economy meanwhile showed clear signs of slowing, with industrial production rising 1.1 percent year-on-year.
"Today's figures add to the evidence that the economy had slowed significantly even before July's attempted coup," Capital Economics told clients.
Russia's rouble strengthened 0.7 percent thanks to oil prices rising more than 1 percent to the highest in 12 days.
South Africa's rand rose 0.3 percent to nine-month highs, boosted by the global backdrop as well as last week's election which saw the ruling ANC party suffer its worst result since taking power in 1994.
Currencies across central and eastern Europe fared less well, with Poland's zloty and Hungary's forint both weakening 0.2 percent against the euro ahead of economic data due this week.