October 30, 2018 / 9:09 AM / 14 days ago

EMERGING MARKETS-Emerging-market stocks fall for sixth day, yuan hits 10-yr low

* Chinese yuan hovers at decade-low levels

* Shanghai stocks boosted by moves to enhance liquidity

* South Africa unemployment report eyed

By Sruthi Shankar and Aaron Saldanha

Oct 30 (Reuters) - Concerns about a new wave of U.S. tariffs on China sent the yuan to its weakest level in a decade on Tuesday and undermined emerging-market stocks and currencies as investors worried about knock-on effects for global growth and prices.

The MSCI's benchmark emerging equity index was down for the sixth day running, although Chinese stocks were propped up by the latest moves by domestic regulators to support market flows.

In a torrid month for all stocks, emerging markets are on course for their worst performance since May 2012, driven by nerves about U.S. interest rates, trade and a slowdown in economic and corporate profit growth.

The Chinese indexes were still down more than 22 percent this year and Hong Kong's main Hang Seng index was down 0.83 percent on the day.

Russia's MOEX stock index declined about 0.5 percent as energy stocks followed Brent crude prices lower.

"The sell-off in Chinese equities and the continued downward pressure in the yuan suggest that negative sentiment is dominating and has actually run well ahead of economic activity," said Eugenia Victorino, head of Asian Strategy at Swedish bank SEB. "It's more of a confidence shock."

Currency investors took cover in the dollar and yen after Bloomberg reported that Washington is preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between U.S. President Donald Trump and Chinese President Xi Jinping fail to ease the trade war.

The yuan fell to a 10-year low of 6.9724 per dollar in onshore trade, stirring speculation over whether the central bank will tolerate a slide beyond 7 per dollar.

"If the authorities are mindful of the potential impact on sentiment and capital flows, they have to gauge the potential negative impact on sentiment," said Frances Cheung, head of Asia macro strategy at Westpac in Singapore.

She also flagged the danger of an overshoot of any level beyond 7 yuan per dollar if Beijing allows the symbolic level to crack.

South Africa's rand gained about 0.4 percent, before third-quarter unemployment figures are released. Investors want to see if the recession-hit economy is showing signs of recovery, given the threat of a downgrade in the country's sovereign rating.

The rand has weakened against the dollar since last Wednesday, when Finance Minister Tito Mboweni delivered a medium-term budget with wider deficit estimates and lower growth forecasts.

For GRAPHIC on emerging market FX performance 2018, see tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance 2018, see tmsnrt.rs/2OusNdX

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Sruthi Shankar and Aaron Saldanha in Bengaluru, additional reporting by Winni Zhou and John Ruwitch in Shanghai; editing by John Stonestreet)

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