EMERGING MARKETS-Stocks drop on growth worries, trade anxiety ahead of Fed meet

* Markets priced for 25 bp Fed cut, eye guidance

* Asian indices fall on trade woes, growth worries

* Lira rally continues on rate cut boost

* Forint higher after Orban promises stimulus

July 29 (Reuters) - Emerging market stocks fell on Monday as weak economic data from China added to concerns of an enduring U.S.-China trade war taking its toll on global growth, while investors awaited more clues on future policy stance from the U.S. Fed meeting this week.

MSCI’s index for emerging markets shares slid 0.3% as heavyweight Asian indices chalked up the biggest losses with Hong Kong stocks down over 1%.

Data showed profits earned by China’s industrial firms contracted in June, fuelling concern that a slowdown in manufacturing from a bruising trade war will drag on economic growth.

U.S. and Chinese trade negotiators will meet in Shanghai from Tuesday for their first in-person talks since a G20 truce last month but expectations are low for a breakthrough.

The onslaught on soft economic data in the past few weeks has heightened expectations for a 25 basis point cut by the U.S. Federal Reserve which is set to begin its two-day meeting on Tuesday.

“To say the consensus expects a 25bp cut is an understatement,” said Kit Juckes, macro strategist at Societe Generale in a note.

“The guidance, and how the market adjusts its pricing further out, will be critical, for everything.”

South Korea’s Kospi index fell nearly 2% to a two-month low as tensions with Japan added more pressure on the export-dependent economy already hurting from weak global demand due to the U.S-China trade stand-off.

Indian shares lost steam and moved lower clouded by weak corporate results, while bond yields fell after the finance minister’s said the government did not intend to review its overseas borrowing plan.

Indices outside Asia fared better with Moscow stocks moving marginally higher and those in Johannesburg climbing 0.5%.

Emerging market currencies which tend to gain on a rate cut expectation from central banks in the developed world, were mixed.

Turkey’s lira rose 0.6% continuing the rally it started after the central bank cut rates last week, while Russia’s rouble was 0.3% lower tracking lower oil prices.

South Africa’s rand steadied but hovered near a 4-week low hit last week after rating agencies Fitch and Moody’s warned about fiscal pressure on the economy in lieu of a larger bailout plan for debt-laden state utility firm Eskom.

In emerging Europe, Hungary’s forint was slightly higher after Prime Minister Viktor Orban said over the weekend hid government expects to introduce two more economic stimulus programmes next year as growth slows in the European Union, its main trading partner.

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