EMERGING MARKETS-Stocks sputter on China property sector woes, Hungary in focus

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China's 10-year bond yields drop to lowest since 2002

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Hungary expected to deliver 100 bps rate cut

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Czech economy rises 0.2% in the fourth quarter

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EM stocks down 0.7%, FX up 0.2%

By Amruta Khandekar

Jan 30 (Reuters) - Equities in emerging economies lost momentum on Tuesday as markets in China and Hong Kong were hit by growing property sector concerns, while the Hungarian forint was subdued in the run-up to a widely expected local rate cut.

MSCI's index for emerging market (EM) stocks had shed 0.7% by 0912 GMT, coming off a two-week high hit in the prior session.

Heavyweight China and Hong Kong stocks fell 1.8% and 2.3% respectively, as the liquidation of property giant China Evergrande triggered fresh concerns over China's heavily indebted real estate sector.

"The Evergrande headlines yesterday serve as a reminder that there are no quick fixes for the property sector and the measures announced by policymakers to support local equity markets...are not proving effective," Chris Turner, global head of markets at ING wrote in a note.

China's 10-year government bond yields, slid below 2.47% to their lowest levels since June 2002 as markets bet the country would ease monetary policy to support its faltering economy. Most other Asian bourses were also in the red as an uptick in oil prices due to tensions in the Middle East raised concerns about prolonged inflationary pressures ahead of the U.S. Federal Reserve's interest rate announcement due on Wednesday.

Commentary from the central bank following the decision will be a key catalyst for risky EM assets as it will influence bets about the timing of U.S. rate cuts, which have been scaled back this month.

Equities in Turkey, South Africa, Poland and Romania climbed between 0.2% and 0.6%.

In currencies, the Hungarian forint was down 0.1%, languishing at near four-month lows against the euro ahead of a local monetary policy decision due at 1300 GMT. The National Bank of Hungary is expected to cut its base rate by 100 basis points to 9.75%, according to a Reuters poll.

The Czech crown slipped 0.1% while the benchmark ten-year bond yield fell to 3.904%. Data showed the Czech economy rose 0.2% on a quarterly basis in the last three months of 2023.

A broader gauge of EM currencies edged up 0.2%.

The South African rand slipped 0.1%, while the Thai baht, South Korean won and Taiwan dollar rose between 0.2% and 0.5% against the dollar.

Highlights:

** Former Pakistan PM Imran Khan gets 10-year jail term

** Poland's Bank Millennium rises 1.5% after Q4 profit beat

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(Reporting by Amruta Khandekar; editing by Jason Neely)