* Stocks, FX gain for a second straight session
* South African rand bounces back from record low
* Continue to expect heightened volatility- Analyst
By Ambar Warrick
April 7 (Reuters) - Emerging market stocks and currencies extended gains on Tuesday as the continued tapering of the coronavirus' toll in certain European and U.S. hotspots led many to cautiously believe the pandemic may have peaked.
MSCI's index of developing world stocks .MSCIEF added about 2%, while the currencies index .MIEM00000CUS firmed about 0.5% as the rates of new infections in several U.S. states appeared to be slowing, while the rate of new deaths in Spain also fell. analysts maintained a cautious stance as global COVID-19 cases continued to rise, with the outbreak's economic shock set to send the global economy into a deep recession.
"We believe it is too early to definitively call for a turn in the pandemic, and investors should continue to expect heightened volatility," said Mark Haefele, chief investment officer, UBS Global Wealth Management.
"The market action in the last 24 hours provides further indications that markets may be normalising after a period of heightened anxiety. But the situation remains highly fluid."
South Africa's rand ZAR= was among the best performing currencies, adding about 1.5% as it bounced back from a record low touched on Monday.
The pandemic has only added to concerns over South Africa's economy, which had logged shrinking economic growth even before the outbreak.
Equities in the country .JTOPI rose 2.2%.
Chinese stocks also rose after Beijing unveiled more stimulus measures last week to dampen the economic shock from the outbreak. .SS
Russia's rouble RUB= strengthened, while stocks in the country also gained on a rise in oil prices, amid hopes of further production cuts as the coronavirus wreaks havoc on crude demand. O/R
The number of coronavirus cases in Russia rose by more than 1,000 for the first time to reach 7,497 in the past 24 hours. lira TRY= firmed about 0.9%, but was still around levels last seen in the aftermath of a debt and currency crisis in 2018. Turkish stocks firmed 2.4%.
For GRAPHIC on emerging market FX performance in 2020, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see https://tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB
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