* China security law sparks fresh protests in Hong Kong
* Mainland China, HK shares, Chinese yuan slide
* S.African rand, Russian rouble knocked off multi-week highs
By Susan Mathew
May 27 (Reuters) - Emerging market shares and currencies dipped on Wednesday with investors weighing rising social unrest in Hong Kong and fears of an escalation in U.S.-China tensions against hopes of a post-pandemic economic recovery.
Hundreds took to the streets in Hong Kong to oppose a national security law proposed by China that has sparked global fears that the freedoms helping the city prosper as an interface between China and the West could be eroded. blue chips .CSI300 fell 0.7% and Hong Kong's main index .HSI 5% as investors also feared escalating Sino-U.S. friction, with U.S. President Donald Trump saying he was working on a strong response against China's move. yuan CNY= slumped to its lowest since September, last trading at 7.152 against a dollar propped up by its safe-haven appeal. The Hong Kong dollar HKD= was flat. FRX/ are yet to see the wording of the security law (but) no matter how China and Hong Kong CEO Carrie Lam dress it up, the passage of the legislation ... will further darken relations between the U.S. and China," said Jeffrey Halley, senior market analyst at OANDA.
The Turkish lira TRY= slid 0.5% as traders returned from a four-day weekend, while South Africa's rand ZAR= was knocked off a two-month high. Declining oil prices saw Russia's rouble RUB= come off its highest in 11 weeks. O/R
Still, most other Asian shares as well as bourses in emerging central and eastern European economies extended gains on hopes that a pickup in economic activity would help the global economy emerge from a pandemic-driven recession.
"The market's ability to compartmentalise U.S.-China tensions away from the bullish-for-risk reopening narrative is a testament to the incredulous amounts of stimulus provided by central banks and governments around the world," said Stephen Innes, markets strategist at AxiCorp.
Japan, Spain, Italy, India and South Africa are among countries to gradually restart businesses after sweeping lockdowns were imposed to curb the spread of the novel coronavirus, but analysts have warned of another selloff in equities if the reopenings spark a second wave of infections.
For GRAPHIC on emerging market FX performance 2020, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2020, see https://tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets CENTRAL EUROPE market report, see CEE/
For TURKISH market report, see .IS
For RUSSIAN market report, see RU/RUB
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