* MSCI EM stock index up 0.6% * Russian shares hit another record high before slipping 0.3% * Russia’s rouble pushed off eight-month highs against dollar March 16 (Reuters) - Emerging market stocks rose on Tuesday, following an upbeat handover form Wall Street on economic recovery hopes, while currencies made muted moves with all eyes on the U.S. Federal Reserve’s policy decision. MSCI’s index of emerging market shares was up 0.6% as U.S. treasury yields retreated, with most main indexes across Asia in the black. Turkey’s BIST rose 0.4% while Russia’s MOEX scaled record highs before retreating 0.5%. Hungary’s main index hit two-week highs while Polish stocks added 0.3%. These moves come after the S&P 500 and Dow Jones Industrial Average closed at record highs on Monday. The dollar was steady with investors making cautious moves ahead of the Fed’s decision due on Wednesday. Communication from the central bank has indicated that it will maintain its accommodative stance till the economy gets on a path to sustained recovery. “Some bond complacency has crept into markets overnight and that they are assuming that the (Fed) will calm the inflationary waters. There is a genuine danger that the Fed disappoints the street,” said Jeffrey Halley, senior market analyst, Asia Pacific, OANDA. “If the (Fed) doesn’t play ball this week, another U.S. yield spike is on the way; the dollar will rise, Asian currencies with dirty dollar pegs will break into a cold sweat, and richly priced 2020 equity darlings may join them.” EM currencies made small moves with declining oil prices pushing crude exporter Russia’s rouble off eight-month highs against the greenback to trade flat. South Africa’s rand fell 0.2%, while Turkey’s lira inched higher. Eyes this week will also be on EM central bank decisions with rising inflation expected to jawbone a rate hike in Turkey, while Russia is seen holding rates on Friday and laying the groundwork for an imminent raise. “We expect (Turkey’ central bank) to react to upside risks on the inflation front with higher commodity prices via a 100 basis points rate hike this month,” said Muhammet Mercan, ING’s chief economist, Turkey. “Reviving currency volatility and its aim to strengthen reserves and support demand for (lira) should be other factors behind such a decision.” Turkey set up a price stability committee last week, which Finance Minister Lutfi Elvan said will compliment and strengthen the hand of the central bank’s monetary policy. 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 Susan Mathew in Bengaluru, editing by Ed Osmond)