EMERGING MARKETS-China stocks rally, Pakistan shares hit record high on IMF deal

Emerging market stocks jumped nearly 2% on Thursday, boosted by Chinese and Hong Kong shares on Beijing's promise of more policy measures, while Pakistan's stock index hit a lifetime high after the IMF's long-awaited bailout deal approval. The Shanghai Composite index and blue-chip CSI300 Index jumped about 4%, logging their highest closing level since June and a seven-day winning streak.

Emerging market stocks jumped nearly 2% on Thursday, boosted by Chinese and Hong Kong shares on Beijing's promise of more policy measures, while Pakistan's stock index hit a lifetime high after the IMF's long-awaited bailout deal approval.

The Shanghai Composite index and blue-chip CSI300 Index jumped about 4%, logging their highest closing level since June and a seven-day winning streak. The Hang Seng Index also closed more than 4% higher. The mainland properties index jumped 16.5%, its biggest one-day gain in more than two years. Sentiment got a boost from Chinese leaders pledging to deploy "necessary fiscal spending" to meet this year's economic growth target of roughly 5%, and a report that China is considering injecting up to 1 trillion yuan of capital into its biggest state banks to increase their capacity. Reuters reported that China plans to issue special sovereign bonds worth about 2 trillion yuan this year, citing two sources with knowledge of the matter.

This comes in the face of the world's second-largest economy facing strong deflationary pressures due to a sharp property market downturn and frail consumer confidence. "Southeast Asia has scope for a consumer revival over the coming quarters as lower inflation, a weakening U.S. dollar, and lower U.S. rates permit local interest rates to come down," UBS analysts wrote.

"The region offers economic and investment diversity and should remain well-supported in a global soft landing, even with a softer China." Pakistan's benchmark share index hit a lifetime high in early trade, before slipping into the red, after the International Monetary Fund's board approved a $7 billion bailout deal for the struggling economy. The MSCI index for EM stocks climbed 1.8%, on track for its sixth day of gains, with main stock indexes in Central and Eastern European countries such as the Czech Republic, Poland and Hungary also up between 0.4% and 0.6%.

South Africa's benchmark Top-40 index jumped 1.4% to hit a fresh record, rising for the fifth straight day. Central bank data showed the country recorded foreign direct investment inflows of 16.6 billion rand in the second quarter, down from first quarter's 24.4 billion rand. All eyes are on Mexico's monetary policy decision later in the day, largely expected to cut interest rates by 25 basis points, while Sri Lanka and Ghana's decisions are due on Friday. Meanwhile, Saudi Arabia is preparing to abandon its unofficial oil price target of $100 a barrel as it prepares to increase output to win back market share, even if it means lower prices, the Financial Times reported. Elsewhere, Kenya's government is close to agreeing a $1.5 billion loan from the United Arab Emirates with an interest rate of 8.2% which will help bridge its financing gap, Reuters reported. HIGHLIGHTS:

** Hungary central bank's key inflation gauge to exceed 3% next year ** Argentina economic activity smashes forecasts, raising 'turning point' hopes For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see

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