(Updated at 0852 GMT)

*

Algeria declares President Tebboune election winner

*

Putin loyalists set to win local elections

*

Fitch upgrades Turkey's rating on improved fiscal policy

*

EM stocks down 1.2%, FX off 0.4%

By Johann M Cherian

Sept 9 (Reuters) - Sentiment across most developing

markets soured on Monday with Chinese stocks hitting a

seven-month low as the economic outlook remained grim, while

investors in Kenya parsed government proposals for fiscal

reforms.

MSCI's gauge for equities in emerging markets fell

1.2% to a one-month low, after finishing its second-straight

week in losses on Friday, as economic growth worries in the

United States weighed on appetite for riskier assets.

China's main indexes, lost over 1% each

after data showed consumer inflation accelerated in August but

fell short of expectations, while producer price deflation

worsened.

Hong Kong stocks were down 1.4%, with rate-sensitive

property shares falling 3.5% to a record-low. The yuan

also weakened 0.4% and bond yields across the curve

slipped to record

lows.

"The government and the Party continue to struggle to agree

on reforms or launch a fiscal program that could support private

consumption in China, this situation is not expected to change

in the near future. Low (core) inflation in China is therefore

likely to persist for some time," said a group of analysts at

Commerzbank.

In Turkey, the lira and bond yields were flat,

while an index tracking local banks shed 1.2%. Ratings

agency Fitch upgraded the country's long-term foreign-currency

Issuer Default Rating to "BB-" from "B+", citing improved fiscal

policy and better external buffers.

Meanwhile, Kenya's shilling and bonds were little

changed after the finance minister said he would seek

suggestions from the public on new legislation to boost revenue,

adding that he would cut taxes in the medium-term and avoid debt

restructuring.

Recent attempts to raise taxes were met with deadly

protests, forcing the government to withdraw the measures.

Russia's rouble and Ukraine's hryvnia were

subdued against the backdrop of their more than two-year

conflict.

Early vote counts from tightly controlled gubernatorial

elections showed supporters of President Vladimir Putin and his

war in Ukraine were set to win across Russia, including in Kursk

where Ukrainian forces have seized control of some towns and

territory.

Most currencies in central and eastern Europe were muted

against the euro, but could see moves later in the week,

following the release of local inflation reports and a likely

quarter-point interest rate cut from the European Central Bank.

Elsewhere, Algeria's dinar was flat. The north

African country's authorities declared Abdulmadjid Tebboune the

overwhelming winner of presidential elections over the weekend.

Later in the week, investors will monitor a debate between

Democrat Kamala Harris and Republican Donald Trump, the first

between the two candidates ahead of the U.S. presidential

election on Nov. 5.