LOS ANGELES (MarketWatch) -- Russian and Turkish stocks stood out from their emerging-market rivals in July, helping push the investment class to its best gain in four months as panic over European debt loads subsided and as China's economy expanded, albeit at a slower pace. The MSCI Barra Emerging Markets Index, which tracks stock performances in 21 countries, is up about 8% this month, its strongest gain since notching a similar advance in March. What to believe, bonds or equities? Bond markets have been considered a better predictor of the future than equities. Given the different signals bonds and equities are giving about the economy's prospects, that might be important now. But bond investors have been known to get things drastically wrong, as they did in 2007. "Since we hit this low and bottomed back in May, the technicals have been steadily improving and have been in stronger positions coming out of that major correction," said Richard Ross, global technical strategist at Auerbach Grayson, in a telephone interview. "We've had nice reactions to those bear markets," which had been seen in a number of countries including Russia, he added. China's Shanghai index in May also dropped into what's known as a bear market, or a tumble of 20% off recent highs. Read previous story about global bear markets. Of the MSCI index's country constituents, Russia and Turkey each have posted July advances of more than 10%, and China and Brazil each rose more than 9%. The iShares MSCI Emerging Markets Index, an exchange-traded fund that tracks the performance of the index (EEM 41.20, +0.07, +0.17%) , has jumped more than 10%. While all of the MSCI EM Index's constituents are on track to rise in July, Morocco's market is the weakest advancer, heading for a slim gain of about 0.1%, followed by a 1.4% rise for Peru and a 1.6% gain for India. EEM 41.20, +0.07, +0.17% SPX 1,102, -4.60, -0.42% 20%10%0%-10%-20% FMAMJJ The key EM index had been in a slump in recent months. It slipped 0.9% in June, extending a 9.2% slide in May. China sets the tone Russia's market has made one of the most dramatic comebacks since the spring. Its dollar-denominated RTS stock index is up 12% heading toward the end of July. For the commodity-rich Russian market, the "China story is an important one," as the country drives a global infrastructure buildout that's been key for other commodity producers, including countries in the Middle East, Chile and Brazil," according to John Derrick, portfolio manager of U.S. Global Investors' Eastern European Fund (EUROX 9.23, +0.08, +0.87%) . The fund has $372 million in assets under management, and Russia is its most heavily weighted country, at 52.94%. "People were concerned that China was tightening and at risk for a hard landing, with growth slowing to 5% to 6%," Derrick said during a telephone interview. "Now expectations are that China will engineer that soft landing, with about 8% growth for the rest of the year." China, according to government statements in the past week, doesn't expect an economic slowdown to result in a "double-dip" recession, but it will continue with stimulus spending to support the economy. Read about China's economic expectations.

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