EMERGING MARKETS-Stocks, currencies fall as Fed rate-cut outlook scaled back

* New Shanghai tech board eclipses benchmark index

* Currencies of crude importers slide as oil prices rise

* Rate meetings in Russia and Turkey later this week

By Agamoni Ghosh

July 22 (Reuters) – Emerging-market assets fell on Monday as expectations dwindled for an aggressive interest-rate cut by the U.S. Federal Reserve, while the introduction in China of a Nasdaq-styled index pulled investment away from existing indices.

U.S. President Donald Trump said on Friday the U.S. Treasury Secretary had a good talk with his Chinese counterpart, amid signals from China that officials may soon meet in their bid to end a year-long trade war.

A 25-basis-point rate cut by the Fed next week has been priced in by the markets. Expectations of 50-bps cut have waned as the trade conflict seemed to abate and economic data turned more encouraging.

“U.S. economic data remains solid, inflation is not worryingly low, unemployment is at multi-decade lows … it therefore remains possible that the market will be disappointed by the pace of Fed easing,” UBS analysts said in a note.

MSCI’s index for emerging-market stocks dropped 0.4%, led by losses in the Shanghai benchmark index as the country’s new Nasdaq-style STAR Market drew investor attention away from the main markets.

STAR is being seen China’s boldest attempt at capital market reforms, driven by Beijing’s ambition to become technologically self-reliant as the prolonged trade war with Washington catches Chinese tech firms in the crossfire.

China’s blue-chip index and Hong Kong stocks ended lower. South Korea’s Kospi was flat.

Outside Asia, markets in Moscow, Johannesburg and Istanbul, all fell between 0.2% and 0.5%.

Most developing-world currencies were lower against the dollar. The currencies of crude-oil importers were hardest hit, including Turkey’s lira and India’s rupee, as geopolitical tensions in the Middle East pushed up oil prices.

The same jump in oil prices helped Russia’s rouble gain. Investors were looking to Friday’s central bank meeting, where a rate cut of 25 bps is expected.

Markets will also be watching for a Turkish central bank decision on rates on Thursday. The median forecast in a Reuters poll of 23 institutions was for a rate cut of 250 basis points.

Turkey’s benchmark rate was raised to 24% last September to stem the decline of the lira. The central bank has since left it unchanged as the economy slid into recession, to prevent renewed losses in the currency.

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For RUSSIAN market report, see (Reporting by Agamoni Ghosh in Bengaluru, editing by Larry King)