By Claire Milhench
LONDON, Sept 24 (Reuters) - Emerging stocks fell for a fourth straight day on Thursday and currencies also broadly weakened on growing fears over Chinese economic growth and the possibility of a crisis in Brazil.
The benchmark emerging equity index slipped 0.65 percent, on course for its second worst week of the year, pulled lower by Hong Kong and Taiwanese shares , which lost around 1 percent.
The Taiwan dollar hit a nearly 6-1/2-year closing low after the central bank cut interest rates for the first time since 2009, in a nod to the weakening economy.
"This (bearish sentiment) seems to be due to lingering concerns over the weakness in China - yesterday we had a weaker-than-expected PMI reading and that caused some wobbles in the market," said William Jackson, senior emerging markets economist at Capital Economics. "That impacts other Asian economies."
Activity in China's factory sector shrank to a 6-1/2-year low in September, Wednesday's data showed, raising fears that third-quarter economic growth could dip below 7 percent for the first time since the global financial crisis.
Chinese mainland shares closed 0.7 percent higher, but across Asia volumes were thin as Singapore, Malaysia and Indonesia were closed for a public holiday.
Ripples from Wednesday's dismal reading were felt in Latin America overnight, with the Brazilian real hitting a fresh record low against the dollar. Mexico's peso was at its weakest in nearly a month.
Latin America is being hit by its reliance on Chinese commodity demand, Jackson said, adding: "In Brazil that's compounded by a messy political situation, rising debt, a poor fiscal position and the risk of a (ratings) downgrade."
Brazil called extraordinary auctions on Wednesday to sell currency swaps and dollars with repurchase agreements, but the interventions did little to support the real, which has lost more than 35 percent this year.
Brazilian retailer General Shopping has deferred coupon payments on $150 million of subordinated debt and offered creditors a 50 percent write-down on another debt tranche.
"When placed against the backdrop of a plummeting real and the prospect of rising U.S. interest rates, there is a strong likelihood that further evidence of distress will emerge among companies that have borrowed heavily in dollars from overseas," Maplecroft analyst Michael Henderson wrote.
The Turkish lira and the South African rand fell 0.6 percent and 0.4 percent respectively.
Both countries kept rates on hold this week, although some analysts had argued that raising rates might have been more prudent. Investors expect these countries to be first in the firing line when the U.S. Federal Reserve raises rates because of their current account deficits.