* China blue chips hit over 1-year high
* Turkey’s lira, stocks fall after local elections
* Russia’s rouble snaps four session losing run
By Susan Mathew
April 1 (Reuters) - Chinese stocks led emerging market shares higher on Monday as positive Chinese manufacturing data eased worries about a broader economic slowdown with progress in U.S-China trade talks providing an additional boost.
Mainland Chinese stocks climbed 2.6 percent with blue chips hitting their highest in over a year, taking MSCI’s index of emerging market shares 0.8 percent up to extend gains to a third straight session.
Factory activity in China grew for the first time in four months in March, official data showed, stumping expectations and suggesting that government stimulus measures may be starting to take hold in the world’s second largest economy.
This encourages risk sentiment as it suggests that concerns of a deeper global growth slowdown may have been blown out of proportion, analysts at Maybank said in a note.
Shares in Hong Kong rose 1.8 percent, while those in South Korea added 1.3 percent. Elsewhere in emerging markets, South African shares hit a six-month high, up 1.3 percent while Russian stocks climbed 0.4 percent.
A cooling in the Chinese economy - partly due to a bruising trade dispute with the United States - has been one of the drivers of a slowdown in global growth, spurring risk aversion and rattling markets around the globe.
Signals that trade negotiations between the United States and China had made headway also helped sentiment ahead of the next round of talks in Washington.
Currencies of developing economies firmed against a softer dollar with most currencies across Asia firming.
The Turkish lira and stocks, however, bucked the trend, losing 1.4 percent and 0.7 percent, respectively, after local elections. As the last votes were tallied President Tayyip Erdogan’s AK Party lost control of the capital Ankara and trailed in Istanbul, the country’s largest city.
“The ruling party is likely to re-double its effort to kick-start the economy. But besides this, we do not expect the election outcome to trigger deeper change,” Commerzbank analysts said in a note.
“From a policy standpoint, we should anticipate a wider fiscal deficit as government spending is boosted ... We should also anticipate measures to relax bank lending norms and efforts to bring down bank lending rates,” they said.
The lira has seen steep losses over the last few sessions, hit by a sweeping lack of confidence among Turks, with uneasy relations with the United States and concerns about post-election government policy hurting sentiment.
Its recent gyrations have sparked fears of a repeat of the August currency crisis which led to the lira losing almost 30 percent of its value last year.
Russia’s rouble rose for the first time in five sessions, up 0.5 percent.
On Friday, the currency dropped 1 percent after Bloomberg reported that the United States had prepared new sanctions against Russia over the poisoning of former spy Sergei Skripal and his daughter in Britain last year.
South Africa’s rand jumped 1.6 percent as ratings downgrade fears eased after Moody’s said late on Friday it would not publish a review of the sovereign debt rating as indicatively scheduled.
Most emerging European currencies gained against a stronger euro, with the Czech crown erasing earlier losses incurred after the Markit PMI index showed Czech manufacturing sentiment fell in March.
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For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru, editing by Emelia Sithole-Matarise)