Updated at 0900 GMT
By Johann M Cherian
June 25 (Reuters) - Currencies and stocks in emerging markets were tepid on Tuesday ahead of key U.S. inflation data later in the week, while investor focus remained on local politics in South African and Indian equities a record high.
MSCI's main gauge tracking stocks in emerging markets .MSCIEF edged 0.1% higher, while an index tracking currencies .MIEM00000CUS was flat against the dollar.
Crucial U.S. inflation data on Friday could impact the trajectory of the Federal Reserve's monetary policy and influence easing cycles in emerging and frontier markets.
South Africa's rand ZAR= gave up early gains and slipped 0.2%, while the benchmark stock index .JTOPI shed 0.3% as investors were on edge after reports of over cabinet positions between the two biggest parties in the unity government.
The 30-year benchmark Treasury bond yield ZAR2030= dropped eight basis points (bps) to 9.775%.
Traders are also monitoring how many ministerial posts would be assigned to the market-friendly Democratic Alliance party in one of Africa's biggest economies.
"Politically, it should be that coalitions are something for South Africa and the African National Congress. Tensions within the government will, therefore, arise time and again – a break-up (in the coalition government) is a possibility at any time," said Volkmar Baur, FX strategist at Commerzbank.
Meanwhile, China's blue-chip index .CSI300 slipped 0.5% and Hong Kong's Hang Seng index .HSI closed up 0.2%.
The Biden administration is investigating China Mobile 0941.HK, China Telecom 0728.HK and China Unicom 0762.HK over concerns the firms could exploit access to American data through their U.S. cloud and internet businesses by providing it to Beijing, as per sources. However, shares of the firms settled higher between 0.6% and 1.9%.
In south Asia, India's BSE Sensex index .BSESN rose 0.8% to hit an all-time high, lifted by heavy-weight financials.
Moody's Ratings, which has a Baa3 credit rating on the country, warned that worsening domestic water shortages can impact its sovereign credit strength.
Indian bonds will be included in JPMorgan's widely-tracked emerging market debt index on June 28.
Sri Lanka's main stock exchange .CSE was flat. Foreign Minister Ali Sabry said that the country expects to sign a debt restructuring agreement with a group of creditor on Wednesday, allowing them to recommence lending to the island that slid into crisis in 2022.
Czech's koruna EURCZK= outperformed central and eastern European peers, climbing 0.2% against the euro, though it is likely to see some pressure as economists expect the local central bank to trim borrowing costs later in the week.
(Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Sonia Cheema)
((johann.mcherian@thomsonreuters.com;))
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB