(Repeats story that first ran Wednesday to additional clients; no change in text.)
By Marc Jones and Vincent Flasseur
LONDON, March 30 (Reuters) - Emerging markets are set to end the first quarter of 2016 with strong gains, something few investors would have bet on in January, after the sector's worst start to a year on record.
As this graphic shows (reut.rs/1ZKAaO6), emerging market stocks, currencies and bonds fell in the first few weeks of 2016 as oil prices slumped, China's economic growth faltered and interest rates in the U.S., and therefore the world, rose from record lows.
The rout left MSCI's benchmark EM equity index down 14 percent by the time it bottomed on Jan. 21. Bond market selling drove government bond spreads - a rough reflection of borrowing costs - up over 18 percent.
The recovery began with oil, as winter hit the United States, China threw stimulus at its economy and the Federal Reserve rolled expectations for interest rate increases.
"It had all been about the three C's. Commodities, China and central banks," said Aberdeen Asset Management investment committee member Kevin Daly.
When oil slumped to $27 a barrel, people were predicting some "pretty dark outcomes" for the global economy, Daly said. "But since then oil has bounced, the slowdown in the dollar has lead to a firmer Chinese currency and the market has priced out a lot of the Fed hikes, which is a real boost to risk appetite."
Two months on from the lows, MSCI's dollar-based emerging equity index is up 20 percent. Currencies - from the Russian rouble to the South African rand - have strengthened against the dollar and struggling parts of Africa have some of the best-performing bonds in the world.
Probably the most impressive turnarounds came in Brazil, which is grinding through a political crisis.
Sao Paulo stocks, which lost a third of their value in the second half of 2015, have regained more than half of that since mid-January, making it the world's top performing major market.
In dollar terms, Brazilian equities are up more than 25 percent. That's especially remarkable for a country looking to impeach its president.
The Brazilian currency, the real, is up 10 percent and bonds have surged.
Add in big gains for stocks in Peru (25 percent) and Colombia (17 percent) and a big rally in Argentina debt, and Latin America has been the best region globally.
Another turnaround has come in local-currency emerging market debt. Many big global banks and funds were issuing warnings at the start of the year after a torrid 2015. But returns in dollar terms are currently above 8 percent, double that of U.S. Treasuries. (reut.rs/1Rx8jLT)
As this shows (link.reuters.com/weh36s), Hungary - the first developing country to cut interest rates to negative levels - remains Europe's best equity performer with a 12 percent jump, having topped the list last year, too.
It remains just ahead of oil-rich Russia, which is up almost 11 percent for the year and 35 percent since the trough in crude prices, and Poland, which has recovered from an unexpected shock credit rating downgrade in January.
Turkey, a big oil importer but also at the front line of the Syria refugee crisis, has seen stocks jump 17 percent.
Parts of Asia have done well, too. Thailand, Malaysian and Indonesian have seen shares rise 13 percent, 9.5 and 8 percent respectively as they have continued a recovery from big losses last year.
But China's markets, despite Beijing's support, are still struggling. The main equity indices have recovered in recent weeks, but they are still down roughly 8 percent year to date as worries linger about the yuan.
"The PBOC (China's central bank) is now more important for emerging markets than the Fed," said SEB bank emerging market strategist Per Hammarlund. "I don't think I'm being controversial any more when I say that."
Reporting by Marc Jones; Graphic by Vincent Flasseur; Editing by Larry King