LONDON, May 2 (Reuters) - Turkish stocks and bonds hit record highs on Thursday, outgunning otherwise lacklustre emerging markets where weak Chinese manufacturing data and an upcoming European Central Bank meeting kept a lid on activity.
Chinese markets, opening after a holiday, slipped to four-month lows following data showing a fall in purchasing managers' indices in April confirming the slowdown in the world's second-biggest economy.
That kept MSCI's emerging equity benchmark flat, just off six-week highs after the index closed April with a small gain following two lossmaking quarters.
India and Turkey, big beneficiaries of weaker commodity prices, jumped 1-2 percent . Both countries' central banks are expected to cut rates.
Turkish stocks rose 1.8 percent while bond yields fell more than 10 basis points after data this week showed a shrinking trade gap.
"The decline in oil prices is very positive for the balance of payments and the inflation outlook, and with lira still seen as strong, the likelihood of a cut is high," said Murat Toprak, emerging markets strategist at HSBC.
"Second, the market expects an upgrade relatively soon from Moody's, all its recent statements support that view."
Turkey needs a second agency to rate it investment grade, allowing for inclusion in many more investment portfolios.
Russia's dollar-denominated index fell 1.3 percent as weak PMIs in key oil import markets weighed on crude prices.
Weak PMIs hit currencies as Czech and Polish output shrank for the 13th straight month, Hungary's PMI slowed and German production fell for the second month in a row.
Polish short-end bond yields fell to new record lows as markets priced in more rate cuts.
The Romanian central bank left interest rates unchanged, and the Czech central bank was expected to follow suit, but Prague markets will listen for hints on whether policymakers are still thinking about weakening the crown. The crown was flat but the leu weakened 0.4 percent against the euro.
Weak metals prices pushed the rand 0.6 percent lower versus the dollar, bringing year-to-date losses to over 6 percent.
Markets could get some impetus however if the ECB fulfils expectations for a quarter point rate cut later in the day. (Reporting by Sujata Rao; Editing by Hugh Lawson)