By Medha Singh

May 2 (Reuters) - Most emerging markets' currencies rose on Friday, joining a global rally as signs that the United States and China are engaging in tariff talks offered solace to investors hoping for a de-escalation in the damaging trade war.

Beijing is "evaluating" an offer from Washington to hold talks over U.S. President Donald Trump's 145% tariffs, China's Commerce Ministry said on Friday, fuelling hopes of progress in trade negotiations.

Taiwan's dollar TWD=TP firmed 4.8% on Friday to hit a 16-month high, its steepest one-day jump on record, which a trader said was driven by retail investors dumping U.S. dollars. China's offshore yuan CNH=D3 hit a one-month high.

Ken Cheung, director of FX strategy at Mizuho in Hong Kong, said investors were optimistic regarding U.S.-China de-escalation, which would benefit Taiwan's trade-driven economy.

"China's official announcement that they're considering launching trade talks is encouraging," he said.

The MSCI emerging markets index .MSCIEF edged up 2% to a more than five-week high, benefiting recently as investors picked up non-U.S. assets amid policy uncertainty.

Citi strategists maintained their overall "underweight" view on emerging market equities, but said there was room for 5% upside for MSCI stocks index until the end of the year.

Citi upgraded ratings on Brazil and Korea to "neutral", while downgrading Taiwan to "neutral" and lowering its view on Mexico and Saudi Arabia to "underweight."

Emerging markets FX were mixed.

The South African rand ZAR= firmed 0.6% even as a survey showed manufacturing sentiment dropped sharply in April.

The Turkish lira TRYTOM=D3 extended its recent slide to hit a fresh record low against the dollar at 38.5705, as latest data showed the manufacturing sector contracted in April.

The broader index tracking central and eastern European stocks .MIME00000PUS rose 1.9%, while currencies in the region eased against a stronger euro.

The Czech crown EURCZK= and the Hungarian forint EURHUF= slipped 0.1% and 0.3% respectively. J.P.Morgan, however, turned bullish on Hungary, saying valuations for both FX and bonds in the region look attractive.

The Romanian leu RONEUR=R dipped 0.1% ahead of Sunday's presidential election re-run vote which could propel ultranationalist George Simion to power, an outcome likely to cause unease in the European Union and NATO and unsettle investors.

EM funds logged about $1.2 billion in outflows in the week ended April 30, Citigroup said, while China funds saw net redemptions, with $3.3 billion leaving their exchange-traded funds.

Both Latin America and EMEA funds saw inflows, Citi added.

All eyes will be on the U.S. non-farm payrolls report later in the day, which could offer clues on the Federal Reserve's next interest rate cut.

HIGHLIGHTS:

** China 'evaluating' US offer to talk tariffs; warns against 'extortion'

** Romanian presidential election could bring ultranationalist to power

For TOP NEWS across emerging markets nTOPEMRG

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

(Reporting by Medha Singh in Bengaluru; additional reporting by Tom Westbrook; Editing by Freya Whitworth)

((Medha.Singh@thomsonreuters.com; +91 80 6210 0592; X, formerly Twitter: @medhasinghs;))