* China, S.Africa stocks rally more than 1% * Russia, Belarus FX overlook tensions with the West * Turkey’s unemployment rate falls * EMs face greater risk of permanent damage from COVID - BlackRock Aug 10 (Reuters) - Chinese shares helped emerging market equities extend gains to a second session on Tuesday, even as pandemic-related worries lingered, while most developing market currencies outside Asia firmed against the dollar. MSCI’s index of EM shares rose 0.5% as a bounce-back in liquor makers lifted Chinese equities, while stocks in South Africa, India and Russia gained between 0.2% and 1.3%. “The negative developments revolving around COVID-19 have certainly left investors on edge, with caution likely to remain the name of the game over the next few days,” said Lukman Otunuga, a senior research analyst at FXTM. The EM index is now up about 0.7% for the year, sliding from a 2021 high of 12% as a resurgence in COVID-19 infections threatens the pace of recovery, while tightening regulations in China worried global markets. Some emerging markets face the risk of permanent economic damage from the pandemic, the world’s largest asset manager BlackRock warned on Monday. Turkey’s lira rose on Tuesday as data showed a fall in monthly unemployment following easing lockdowns, while traders also focused on a central bank decision later this week. Currencies of Russia and Belarus seemed to shrug off deteriorating ties with the West, with Russia’s rouble lifting off two-week lows to trade 0.2% higher at 73.617 against the dollar. Russia imposed retaliatory tariffs on Britain, while Britain, Canada and the United States announced coordinated sanctions targeting the Belarusian economy and its financial sector. Commerzbank analysts pointed to Russia’s hawkish central bank supporting the currency through recent external volatilities such as the possibility of a quicker stimulus tapering by the U.S. Federal Reserve. They see the rouble trading at 72.00 to the greenback by the end of the year. South Africa’s currency fell 0.3%. As the Delta variant wave of the pandemic grips an economy already riddled by protests and crime, the debt-laden country’s treasury faces a flight of top taxpayers. The rand has given up this year’s gains, trading about half a percent lower so far in 2021. Peruvian assets were eyed after a source said central bank President Julio Velarde has agreed to stay on for an extra term, a move poised to calm markets rattled by the election of the country’s new left-wing president. For GRAPHIC on emerging market FX performance in 2021, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, 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 Susan Mathew in Bengaluru; Editing by Ramakrishnan M.) Our Standards: The Thomson Reuters Trust Principles.