By Karin Strohecker LONDON, Sept 5 (Reuters) - Emerging stocks chalked up their biggest daily gains in eight weeks and currencies strengthened on Monday, lifted by a batch of recent disappointing U.S. data that put a dampener on expectations for a Federal Reserve interest rate hike. MSCI's emerging market index jumped 1.3 percent, helped by Asian bourses , where stocks in Hong Kong hit a one-year high. Indexes in Russia and emerging Europe also notched up solid gains. The rally followed lackluster U.S. numbers, with non-farm payrolls on Friday showing employment growth slowed more than expected in August while Thursday data saw factory activity contracting for the first time in six months. "It is looking very difficult for the Fed to hike now with the (national factory activity) ISM number, which was below 50, and the non-farm payrolls really shook off the expectations," said Jakob Christensen, head of EM research at Danske Capital. "With the Fed out of the way now there is a decent prospect for emerging markets for the next couple of months." Currencies also rallied against a faltering dollar. Russia's rouble strengthened nearly 1 percent against the greenback, with additional support from oil prices roaring 4 percent higher amid speculation that major producers, including Saudi Arabia and Russia, could cooperate to strengthen prices. South Africa's rand jumped by 1 percent in early trading only to give away half the gains after data showed private sector activity inching lower in August, with overall business conditions remaining subdued. In Turkey, the lira gained 0.2 percent despite inflation data showing consumer prices had fallen by more than expected, increasing the central bank's leeway to continue the interest rate-cutting cycle at this month's meeting. "The sharper-than-expected fall in Turkish inflation in August, to 8.0 percent year-on-year, is likely to be used as justification by the central bank for further modest interest rate cuts," Capital Economics's William Jackson wrote in a note to clients, also pointing to core inflation still being far above the central bank's target range. Across central and eastern Europe, currencies also gained against the euro, with Poland's zloty and Hungary's forint both strengthening 0.3 percent. In Croatia, the central bank called an auction to buy euros from commercial banks to ease appreciation pressures on the kuna, with the currency marginally weakening for a third straight session. Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg on year Morgan Stanley Emrg Mkt Indx 911.04 +11.43 +1.27 +14.72 Czech Rep 882.09 +6.38 +0.73 -7.76 Poland 1777.07 +9.52 +0.54 -4.41 Hungary 28367.01 +177.41 +0.63 +18.59 Romania 7008.11 +3.27 +0.05 +0.05 Greece 582.92 +0.79 +0.14 -7.67 Russia 982.01 +12.15 +1.25 +29.72 South Africa 47130.56 +157.94 +0.34 +2.91 Turkey 77464.49 +580.18 +0.75 +8.00 China 3072.79 +5.44 +0.18 -13.18 India 28532.11 +108.63 +0.38 +9.25 Currencies Latest Prev Local Local close currency currency % change % change in 2016 Czech Rep 27.02 27.01 -0.02 -0.07 Poland 4.35 4.36 +0.33 -2.06 Hungary 308.92 310.02 +0.36 +1.85 Romania 4.44 4.45 +0.04 +1.68 Serbia 123.13 123.06 -0.06 -1.35 Russia 64.66 65.13 +0.73 +12.82 Kazakhstan 340.46 341.76 +0.38 +0.01 Ukraine 26.70 26.65 -0.19 -10.29 South Africa 14.39 14.47 +0.56 +7.45 Kenya 101.10 101.10 -0.00 +1.09 Israel 3.76 3.76 -0.10 +3.26 Turkey 2.95 2.95 +0.10 -1.02 China 6.68 6.68 +0.03 -2.76 India 66.44 66.75 +0.48 -0.36 Brazil 3.25 3.26 +0.04 +21.67 Mexico 18.47 18.57 +0.57 -7.01 Debt Index Strip Spd Chg %Rtn Index Sov'gn Debt EMBIG 359 0 .00 7 68.11 1 For GRAPHIC on emerging market FX performance 2016, see http://link.reuters.com/jus35t For GRAPHIC on MSCI emerging index performance 2016, see http://link.reuters.com/weh36s For GRAPHIC on MSCI emerging Europe performance 2016, see http://link.reuters.com/jun28s For GRAPHIC on MSCI frontier index performance 2016, see http://link.reuters.com/zyh97s For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see ) (Additional reporting by Claire Milhench; Editing by Gareth Jones)
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