* White House reassures trade deal with China "fully intact"
* USD weakness supports rise in risky EM currencies
* Russian rouble hits 2-week high ahead of govt bond auctions
By Shreyashi Sanyal
June 23 (Reuters) - Stocks in the developing world ticked higher on Tuesday after U.S. President Donald Trump offered reassurance that a trade deal with China was on track, even as coronavirus cases spiked globally.
Equity markets in Asia were initially hit by comments from White House trade adviser Peter Navarro about the deal with China being "over" but erased losses after he backtracked on his statement. MKTS/GLOB
"The Navarro-induced 'trade-tantrum' has been reversed as quickly as it arrived," said Jeffrey Halley, senior market analyst at OANDA.
The MSCI index of emerging market equities .MSCIEF jumped 0.9% after a soft start to the week on concerns about a second wave of novel coronavirus infections globally.
Emerging market stocks have recovered some lost ground from a pandemic-led meltdown in March after stimulus measures taken by central banks and governments globally, but a potential second wave of infections poses a serious threat to the rebound.
Currencies of developing countries were supported by a weaker dollar USD= . FRX/
"After a spike by the U.S. dollar on the Navarro comments, the 'clarifications' have seen the USD rally quickly unwind ... that is consistent with the 'risk-on' sentiment in financial markets today," OANDA's Halley said.
The Russian rouble RUB= touched a two-week high against the dollar ahead of auctions of Russian treasury bonds popular with foreign investors.
Turkey's lira TRY= weakened as investors remained anxious about data on Monday which showed a 99.3% plunge in the number of foreign visitors arriving in the country in May.
"Although the drop in tourism is a widely known phenomenon, it is still negative for the lira and for risk premia because smaller FX revenue may create unexpected stress on external debt servicing, in complex and non-obvious ways which would be difficult for the market to price in from before," said Tatha Ghose, FX & emerging markets analyst at Commerzbank (DE: CBKG ).
The South African rand ZAR= also firmed, with the focus now on the release of first-quarter unemployment figures later in the day. Also on the radar is an emergency budget due on Wednesday that is expected to show a markedly wider budget deficit. in central and eastern European countries including Hungary HUF= , Romania RON= , Poland PLN= and the Czech Republic CZK= firmed against the euro.
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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