* Indian stocks up more than 5% on big corporate tax cut
* China cuts new benchmark rate for a second month
* Rouble eyes third week of gains tracking higher oil prices
By Agamoni Ghosh
Sept 20 (Reuters) - A surge in Indian shares led emergingmarkets higher on Friday, after the government announced deepcuts in corporate taxes to revive flagging growth, while awidely expected domestic interest rate cut from China added tothe chipper mood.
Indian shares surged 5% and were set fortheir best day in over a decade after Finance Minister NirmalaSitharaman said the effective corporate tax rate would belowered to about 25% from 30% and scrapped the minimumalternative tax for domestic companies.
The move is aimed at reviving private investment, which mayhelp lift growth for Asia's third-largest economy from asix-year low that has caused job losses and fuelled discontent.
"It is an additional measure after the bank mergers and thecapital infusion but potential growth is still on a downwardtrajectory," said Hugo Erken, head of international economics atRabobank.
Growth "will struggle to push that 7% threshold unless alarge scale stimulus package comes by," he said.
That surge helped MSCI's index for emerging market stocksrise 0.5%, with the rupee also the starperformer among emerging currencies, strengthening 0.6%.
Adding to stimulus hopes was a cut in China's key domesticlending rate for the second month in a row, aimed at lowerborrowing costs for companies and consumers in the slowingeconomy.
China's two main share indexes moved 0.3%higher but ended the week lower as Beijing's stance on overallmonetary easing was seen as cautious with policymakers remainingreluctant to join a global stimulus wave.
Indices outside Asia were mixed with Moscow stocksshedding 0.4% but those in Johannesburg and Istanbulmoving 0.3% higher.
Most developing world currencies marched higher against asfeeble dollar with South Africa's rand up 0.4%,recovering ground it lost in the previous session after thecentral bank left its main interest rate on hold at 6.5%.
Russia's rouble strengthened 0.3%, on course todeliver a third week of gains as oil prices headed for theirbiggest weekly gain in months.
For GRAPHIC on emerging market FX performance 2019, see http://tmsnrt.rs/2egbfVhFor GRAPHIC on MSCI emerging index performance 2019, see https://tmsnrt.rs/2OusNdX
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