EMERGING MARKETS-S.African assets bounce from Omicron-driven selloff

* S.African rand bounces from near one-year lows

* Lira extends fall as Erdogan orders manipulation probe

* EM stocks in cautious mood, little known about Omicron variant

By Shreyashi Sanyal

Nov 29 (Reuters) - South Africa's rand and stocks bounced on Monday after concerns about the Omicron coronavirus variant triggered sharp falls last week, while Turkey's lira was hit by President Tayyip Erdogan's orders for an investigation into currency manipulation.

Assets in South Africa sank on Friday as countries barred travel in and around the region in response to the discovery of the Omicron variant.

The rand jumped 1.3% by 0849 GMT on Monday, after falling 2% to 16.36 against the dollar in the previous session, while South Africa's blue-chip stock index gained 1.2%.

"It could still prove less deadly (as virus variants over time mostly are) but if it is more contagious that could offset this and it could still cause similar healthcare issues, especially if vaccines are less protective," analysts at Deutsche Bank wrote in a client note.

South Africa's currency was one of the best performing emerging market currencies in the Europe, Middle East and Africa region during the first half of the year, but analysts had been expecting a fall in markets due to their high valuations and expectations of higher interest rates to quell inflation.

The discovery of the Omicron variant served to speed declines in South African markets.

"After being the best performing currency in the EEMEA (East Europe, Middle East and Africa) region in 1H 2021, the rand erased all its gains in 2H, trading at 16.2 against the U.S. dollar, or around 5.5% weaker compared to this year's start," Credit Suisse analyst Alexey Pogorelov said.

South African government bonds also recovered, with the yield on the benchmark 2030 maturity edging lower in early trading.

Markets remain cautious as little known is about the Omicron variant. The MSCI's index for emerging market stocks dipped 0.3%, with Asian markets leading declines.

Turkey's lira fell 2% against the dollar, hovering just above all-time lows as Erdogan ordered an investigation into possible currency manipulation after his low-rates policy garnered widespread criticism and caused the currency to crash this month.

Data showed Turkey's economic confidence index fell 2% month-on-month in November to 99.3 points. The index points to an optimistic outlook when above 100 and pessimistic when below.

Russia's rouble added 1% against the greenback, while most central and eastern European currencies including Hingary's forint, the Polish zloty and Czech crown edged higher against the euro.

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 RUSSIAN market report, see (Reporting by Shreyashi Sanyal in Bengaluru; editing by Barbara Lewis)