* Lira has outpaced most of its peers this year * Rouble continues to lag peers * MSCI EM stocks index rises for second session Feb 2 (Reuters) - Turkey’s lira led gains across emerging market currencies on Tuesday on optimism over tight monetary policy and improving economic conditions, while stocks rose for a second day as sentiment improved ahead of U.S. stimulus talks. The lira rose 1.1% to hit a near six-month high, and has outperformed most of its EM peers this year after the central bank vowed to maintain tight monetary conditions until inflation is brought in line. The currency has surged more than 3% since the central bank’s vow last Thursday, although concerns over President Tayyip Erdogan’s repeated demands to cut interest rates still persist. Data on Monday also pointed to an ongoing rebound in Turkish manufacturing. ADVERTISEMENT “We, too, think that the new central bank governor will do all that he can do to target inflation more fully this time around – where we differ is being more sceptical about how long the president will patiently bear with this,” Tatha Ghose, FX and EM analyst at Commerzbank, wrote in a note. Most other currencies in Europe, the Middle East and Africa rose, with the South African rand adding 0.9%. Investors were awaiting negotiations between U.S. President Joe Biden and Republican senators on a new COVID support bill. Risk-driven EM assets marked steep losses last week on a mix of profit taking and uncertainty over the timing of COVID vaccine programs, but investors resumed betting on an eventual return to normalcy this year as infection rates slowed and more countries sourced vaccines. The MSCI’s index of emerging market stocks jumped 1.3% on strength in Chinese and Hong Kong stocks, while the Turkish bourse led gains across EMEA. Optimism over an economic recovery in 2021 helped drive foreign net inflows of about $53.5 billion into emerging market stocks and bonds in January, building on the momentum from year-end 2020, data from the Institute of International Finance showed on Monday. Russia’s rouble continued to lag its peers as political unrest brewed in the country over the arrest of Kremlin critic Alexei Navalny, which had sparked nationwide protests. ADVERTISEMENT In central Europe, the Hungarian forint and the Czech crown both rose about 0.3% versus the euro after positive industrial price inflation and economic growth data. The forint was at a more than one-month high to the euro, while the crown was at its strongest since March 2020. For GRAPHIC on emerging market FX performance in 2021, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see tmsnrt.rs/2OusNdX For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see (Reporting by Ambar Warrick in Bengaluru; Editing by Jan Harvey) Our Standards: The Thomson Reuters Trust Principles. MORE FROM REUTERS