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China stocks retreat as reopening hopes fade

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BlackRock neutral on EM stocks

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Romania cenbank seen hiking by 75 bps

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Hungary could decide on new caps on food prices within days

Nov 8 (Reuters) - Emerging market stocks and currencies were stalled on Tuesday, as fading hopes that China would ease COVID-19 curbs gave way to nerves ahead of risk events in the United States, while the Romanian leu looked to a likely interest rate hike.

MSCI's index of emerging market stocks hit new one-month highs before paring gains to trade little changed.

After a stellar rally that saw Chinese blue-chips gain 7.7% and the Hong Kong benchmark 13% over the last five sessions, a surge in the number of COVID infections and official statements that curbs would remain in place saw investors take profits.

But gains in South Korea, Taiwan, Hungary and Turkey helped cap losses.

The broader EM stocks index is down close to 30% this year amid worries about a recession as China growth dwindles and major central banks continue to tighten monetary policy.

"We are neutral EM equities on the back of slowing global growth," a note from BlackRock's Investment Institute said.

Currencies were mixed with the Chinese yuan slipping 0.4%, offsetting gains in other Asian units. South Africa's rand and the Turkish lira slipped 0.2% and 0.9%, respectively, against a strengthening dollar.

Focus for the dollar this week will be U.S. mid-term elections where a grid-lock in Congress is expected. On Thursday, October inflation data will be eyed for bets on monetary policy.

In central Europe, Romania's leu was last trading at 4.88 per euro. The central bank was seen hiking the key rate by 75 basis points to 7% as inflation is seen surging to 16.0% by year-end, above the central bank's current forecasts of 13.9%. The decision is due at 1300 GMT.

ING strategists expect a smaller 50bps hike, and see chances of another 25bps hike in January.

"More important than the rate hike itself will be any hint of an alteration in the tight liquidity management stance. We see little to no chance of this being changed for now," said Frantisek Taborsky, EMEA FX & FI strategist at ING.

In Hungary, the government could decide on fresh price caps on foodstuffs within days to curb inflation, which could peak around 25% by the end of the year, Minister for Development Marton Nagy told Inforadio on Monday.

The forint stayed close to seven-week highs, last trading at 399.58 per euro.

In Russia, the central bank said there was no need to soften capital controls for now as they have been supporting the rouble. The currency was at 61 per dollar in Moscow trade. For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX

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For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru, editing by Ed Osmond)