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EMERGING MARKETS-Shares at seven-month high ahead of Powell speech; rouble recovers

* Rouble up after hitting 4-1/2 year low on local exchange

* EU to discuss Navalny as Russia not cooperating - Germany

* Lira rises but eyes are on tensions in the Mediterranean

* Producer prices data awaited in South Africa

* Belarusian rouble breaks five-day losing run against euro

Aug 27 (Reuters) - An index of emerging market stocks scaled seven-months highs on Thursday before a speech from U.S. Federal Reserve Chair Jerome Powell, while Russia’s rouble rebounded from a sharp fall, with focus on mounting geopolitical tensions.

Investors are bracing for dovish remarks from Powell at the Kansas City Fed’s annual economic symposium. His speech is due to begin at 9:10 a.m. EDT (1310 GMT).

Powell is expected to provide an update on the Fed’s plans to refit its monetary policy approach as persistently low inflation and interest rates numb the effects of stimulus measures aimed at cushioning damage wrought by the coronavirus pandemic.

“Inflation is the keyword and the policy framework to target it will determine whether we see more upside to risk assets in the months to come,” said Hussein Sayed, chief market strategist at FXTM.

MSCI’s index of emerging market shares rose 0.2%, extending gains to a fifth straight session. But some caution set in after United States sanctioned China over military action in the disputed South China Sea.

The dollar, meanwhile, lost traction against most rivals.

Russia’s rouble rose about 0.8% against the greenback and the euro. On the Moscow exchange, the rouble had hit a 4-1/2 year low against the single currency on Wednesday.

European Union ministers urged Russia to join a call on Thursday to discuss how to proceed with an investigation into the suspected poisoning of Kremlin critic Alexei Navalny earlier this month.

The Kremlin has so far declined to open an investigation, but on Wednesday said it hoped Navalny’s illness would not damage Russia’s ties with the West.

In Belarus, international technology companies, a source of foreign income worth 5% of exports, threatened to quit the country as protests against the disputed election of leader Alexander Lukashenko continued with vigour and caused internet outages over several days.

The Belarusian rouble firmed slightly against the euro after plumbing to new for five consecutive sessions.

Turkey’s lira jumped 0.4%. A buy recommendation on Wednesday from JP Morgan had lifted the currency from all-time lows, but tensions with Greece surrounding energy resources in the Mediterranean persisted.

South Africa’s rand rose 0.2% ahead of July producer price data. The currency had weakened on Wednesday after a rise in consumer price inflation was seen as not enough to dampen expectations of further monetary policy easing.

For GRAPHIC on emerging market FX performance 2020, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2020, 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 Raissa Kasolowsky

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