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EMERGING MARKETS-Shares slide as default risks haunt Evergrande

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* MSCI EM stocks index set for worst session in one month 

  * Evergrande hits 11-year low 

  * Cenbank meeting this week include U.S., Turkey, S.Africa 

  * S&P revises Botswana's outlook to 'stable' 

  By Susan Mathew 

  Sept 20 (Reuters) - Emerging market shares sank 1.3% on Monday, set for their steepest decline in a month, with a 3.3% dive in Hong Kong leading declines as China Evergrande plumbed 11-year lows starting down a fast approaching debt payment deadline. 

  Fears of a trickle-down effect from indebted Evergrande's likely default as well as caution ahead of several central bank meetings, including the United States, Turkey and South Africa, weighed on sentiment, pushing investors towards the safety of the dollar. 

  "For as long as this situation of uncertainty lasts we're going to see higher volatility on concerns this may spread and over maybe compromise economic recovery in China which has already been slowing," said Cristian Maggio, head of EM strategy at TD Securities. 

  He said the risk of stimulus tapering by the Fed raises the chances of in higher rate in the dollar, and compounded with the price volatility and deterioration in growth outlook in China, makes for a perfect storm for EM. 

  MSCI's index of EM currencies fell xx% to hit a three-week low, with the South African rand's xx% drop leading the pack. The currency has lost about 5% since last Monday. 

  Asian currencies are expected to be impacted by a possible meltdown at Evergrande as investors rethink their bullish bets on the yuan. 

  After logging its worst week in a month, an index of EM stocks extended losses and is now down about 13% from 2021 peaks hit in February. Markets in China and South Korea were closed for a holiday. 

  Following a bruising session in Asia, bourses in Turkey, Russia, South Africa , Poland and Saudi Arabia all slumped between 1.4% and 2.4%. 

  Russian shares were set for the worst session in a month, and falling oil prices deepened the rouble's losses. 

  Over the weekend, Russia's ruling United Russia party retained its parliamentary majority in elections, as expected, but lost over a tenth of its support, partial results showed. 

  Gazprom lost almost 1% after a group of European Parliament lawmakers asked the European Commission to probe Gazprom's role in soaring European gas prices. 

  Turkey's lira dropped to an over 10-week low, with all eyes on the central bank which has started setting the stage for an interest rate cut amid political pressure, despite surging inflation. 

  Botswana's pula currency hit a three-week high after ratings agency S&P on Friday revised its outlook to 'stable' from 'negative' saying an economic rebound, supported by a strong diamond sector recovery, will lead to an improvement in fiscal and external performance. 

  For GRAPHIC on emerging market FX performance in 2021, see For GRAPHIC on MSCI emerging index performance in 2021, see 

  For TOP NEWS across emerging markets 

  For CENTRAL EUROPE market report, see 

  For TURKISH market report, see 

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

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