* Little progress seen in Israel's judicial overhaul talks
* Russian, Turkish factory activity expands in April
* Polish, Czech manufacturing activity contracts in April
* Czech economy probably out of recession - prelim data
May 2 (Reuters) - Emerging market currencies and stocks were subdued on Tuesday, as many traders returned after a long weekend to digest mixed factory activity data ahead of the U.S. Federal Reserve's rate decision this week.
The MSCI's indexes for emerging market currencies and stocks were flat at 0845 GMT.
Hong Kong's Hang Seng Index closed 0.2% higher as HSBC soared after reporting a tripling in quarterly profit and investors assessed mixed economic data in the world's second largest economy.
Manufacturing activity in China unexpectedly shrank in April but mobility indicators suggest the long Labour Day holiday likely hit a record in terms of number of travellers.
China's heavyweight domestic stock exchanges were closed and will resume trading on May 4.
The International Monetary Fund (IMF) raised Asia's economic forecast as China's recovery underpinned growth, but warned of risks from persistent inflation and global market volatility driven by Western banking sector woes.
Among currencies, the Czech crown gained 0.2% against the euro after preliminary data indicated the economy probably pulled out of recession in the first quarter with slight growth driven by trade.
However, another survey showed factory activity in Czech shrank in April at its fastest pace so far this year as soft demand hit output and new orders.
Conditions in the Polish manufacturing sector also deteriorated in April, while Hungary's seasonally-adjusted Purchasing Managers' Index rose in April.
"The latest PMIs confirmed that manufacturing remains in doldrums in the Czech Republic and Poland as consumers remain cautious due to persistently high inflation that reduced their disposable income," said Piotr Matys, senior FX analyst at In Touch Capital Markets.
Hungary's forint rose 0.3%, while the Polish zloty added 0.4% against the euro.
The South African rand slipped 0.1% against the dollar, with markets focused on local factory activity data for further insight into the health of Africa's most industrialised economy.
Israel's shekel gained 0.3% per dollar. Israeli parties have made no progress towards a compromise over the government's bitterly disputed judicial overhaul package after a month of meetings, Benny Gantz, head of one of the largest opposition parties, said on Monday.
Russia's rouble edged up as the market reopened after a long weekend and data showed activity in Russia's manufacturing sector grew for the 12th month running in April, and new export orders ended a 14-month sequence of decline.
Growth in new orders and output helped Turkish factory activity expand at a faster pace in April, as the sector continued its recovery in the wake of massive earthquakes in early February. The lira was muted against the dollar.
Emerging market sovereign defaults are at a record level, but rating outlooks are more balanced, said Fitch Ratings in a new report.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Christina Fincher)
