OREANDA-NEWS. March 20, 2015. Emerging market stocks were heading for their biggest daily jump in a month on Thursday after the U.S. Federal Reserve poured cold water on expectations it would start raising rates by the middle of the year.

The MSCI emerging equities index rose 1.3 percent, its fourth consecutive day of gains and adding to Wednesday's 0.8 percent rise. The Asia-Pacific ex-Japan benchmark also gained 1.4 percent.

"Once you get a reduced expectation of the level of the Fed funds rate ... and then combine that with what that's likely to mean for the dollar, it's understandable that you get a bit of a relief rally," said Jonathan Lowe, portfolio manager in the Global Multi-Asset Group at JPMorgan Asset Management.

"Emerging markets in particular have been held back by the expectation that there could be a faster than market-discounted rise in U.S. rates."

Leading the charge was the Russian dollar-denominated equity index, which leapt 2.5 percent as the broad welcome for continued easy monetary policy in the United States outweighed the impact of a weak oil market.

But a 1.2 percent fall in Brent crude knocked the rouble 1.2 percent lower, taking it off 2-1/2-month highs hit against the dollar on Wednesday.

Fed dovishness also gave a shot in the arm to some emerging market currencies, although some of the impact had already started to fizzle. Turkey's lira, widely viewed as vulnerable to a rising dollar, gained 1.5 percent on Wednesday but slipped 0.8 percent by 0930 GMT on Thursday.

Similarly, South Africa's rand shifted sharply into reverse after a 2 percent surge, dropping 1 percent.

The Polish zloty and Hungarian forint also slipped versus the dollar but gained around 0.4 percent versus the euro

with the latter hitting a 14-month high.

Hungary's bond auction later on Thursday is likely to see good demand, with the central bank widely expected to cut its 2.1 percent base rate by 10-20 basis points, or even as much as 30 basis points, next week.

Hungarian stocks jumped 1.8 percent.

"After the Fed meeting, a bigger rate cut is more likely," one Budapest-based fixed income trader said.

In Asia, Indonesia's rupiah rose 1 percent while the Indian rupee gained 0.2 percent against the dollar.

China's yuan was set for its biggest-ever weekly gain, which traders attributed to state-owned banks aggressively selling dollars at the behest of Beijing, which is moving to quash speculation.