EMERGING MARKETS-Stocks extend losses on China worries; Hungary c.bank eyed

By Susan Mathew

Nov 22 (Reuters) - Emerging market stocks extended loses on Tuesday on worries that China could reintroduce curbs to contain COVID-19 flare-ups, while Hungary's forint edged higher ahead of a central bank decision where the key rate was seen unchanged.

Mainland China stocks steadied following a slide on Monday, thanks to more support from Beijing for the country's embattled property sector.

But Hong Kong shares fell another 1.3% dragged by tech shares, extending declines to a fifth straight session.

Beijing shut parks, shopping malls and museums on Tuesday while more Chinese cities resumed mass testing for COVID-19 as cases spiked, raising worries about more curbs hitting an economic recovery in the world's second-largest economy.

MSCI's China-heavy index of emerging market stocks fell 0.4% to one-week lows. But capping losses were gains in India , central Europe and Turkey.

"Supply chain disruptions from lockdowns (in China) would not only hurt Chinese manufacturers but regional ones as well... The absence of positive news means investors will stay away instead of participating in bargain-hunting," said Olivier d'Assier, head of applied research, APAC at Qontigo.

Intensifying worries about China's lockdowns come as risk appetite has already been hammered by concerns about the hit to global growth from aggressive monetary policy tightening to control surging inflation.

"Risk aversion remains well above risk tolerance... and a better-safe-than-sorry approach to markets in the short-term."

On Tuesday, EM currencies firmed as the dollar retreated with South Africa's rand, China's yuan and Malaysia's ringgit up between 0.2% and 0.4%.

In South Africa, attention this week will be on inflation figures as well as a central bank policy decision. A Reuters poll expects a 75 basis points hike, but JPMorgan analysts say there may be "sufficient room" for the central bank to consider slowing the pace of tightening.

HUNGARY RATE SEEN ON HOLD

Hungary's forint rose 0.1% to trade at around 408 per euro. The country's central bank is seen keeping the base rate on hold at 13% on Tuesday.

Following last month's emergency rate rise to shore up the forint, which had hit record lows, the bank pledged to offer its new quick deposit tool at an 18% rate "as long as necessary."

On Monday, Hungary also capped interest rates on large commercial bank deposits.

The spectrum of market interest rates dropped modestly after Monday's announcement, which turns out to be FX-negative, said Commerzbank's EM and FX analyst Tatha Ghose, expecting little of interest from Tuesday's meeting. For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX

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For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru; Editing by Alex Richardson)