* Turkish stocks at record high, but lira muted
* Vietnamese stocks mark worst day in nearly 6 months
* Rouble lags as political concerns persist
By Ambar Warrick
Jan 19 (Reuters) - Emerging market stocks surged to a record high on Tuesday as ultra-low interest rates and stimulus hopes brightened their prospects, while most currencies ticked higher as the dollar softened on uncertainty over U.S. policy.
The MSCI's index of emerging market stocks jumped more than 1% to a record high, with Asian stocks providing support on the back of positive Chinese GDP data on Monday.
Turkish stocks were among the top gainers in Europe, the Middle East and Africa (EMEA), rising 0.9% to a record high. Russian and South African stocks added about 0.2% each.
Emerging market stocks have benefited from loose monetary policy and the prospect of a steady economic recovery this year, hitting a series of record highs as they are seen offering better returns than fixed income and currencies.
"We expect that the U.S. dollar will weaken further, policy will remain accommodative, and additional U.S. fiscal support will be forthcoming. All of these factors should contribute to a supportive backdrop for EM assets," Mark Haefele, chief investment officer, UBS Global Wealth Management wrote in a note.
Most EMEA currencies rose as the dollar retreated before testimony from U.S. Treasury Secretary nominee Janet Yellen. Yellen is expected to talk up more stimulus spending, which is likely to weaken the dollar.
South Africa's rand was among the top gainers, as it recovered from steep losses over the past few weeks after higher U.S. yields pushed up the dollar. Investors will be watching for cues from data and a central bank meeting later in the week.
Turkey's lira logged relatively smaller gains in comparison to its peers, as investors were still rattled by President Tayyip Erdogan's downplaying of high interest rates last week.
Russia's rouble lagged its peers, trading slightly lower as a gain in oil prices was offset by the central bank's currency selling program, as well as fears of western sanctions after the arrest of Kremlin critic Alexei Navalny.
Most central European currencies firmed to the dollar and the euro.
Elsewhere, Vietnamese stocks plummeted 5.1% in their worst day in nearly six months, with traders attributing the fall to a correction after a series of steep gains.
For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX
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For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see (Reporting by Ambar Warrick in Bengaluru; editing by Philippa Fletcher)