* Lira down 1%, rand drops 1.5% to March lows * Tencent, Alibaba hit by more regulations * Huarong bonds jump on state-backed rescue plan * Sri Lanka sovereign dollar bonds surge after cenbank rate hike Aug 19 (Reuters) - Emerging market stocks sank 2% to their lowest this year and currencies slid to a four-month trough on Thursday after the U.S. Federal Reserve July meeting minutes suggested it could ease stimulus this year. As the dollar index surged to this year’s peak, Turkey’s lira dropped 1% and South Africa’s rand hit March lows. Sliding oil prices on worries about a demand downturn as the global economy slows saw currencies of crude exporters Russia and Mexico lose around 0.3% each. Massive stimulus from major central banks have helped inflows into riskier assets throughout the coronavirus pandemic. Tapering of those measures could have a negative impact on emerging market assets, although analysts say the possibility of a crisis is low as markets are better prepared. “The high-betas, like the South African rand and the Turkish lira, in a dollar strength situation you expect to be most affected,” said Gabriel Sterne, head of strategy services and global EM research at Oxford Economics. “It’s kind of a situation where you want to hold onto your seatbelt, but we think this will be really short-lived...” The Chinese yuan and mainland stocks slipped, with U.S.-China tensions at the forefront again on tit-for-tat airline capacity limits. On Friday, China is expected to keep its benchmark lending rate unchanged for the 16th straight month, though the economy is losing momentum. Tech stocks fell as Alibaba dived 5.4% to a record low after China’s IT regulator said 43 apps, including Tencent’s WeChat, illegally transferred user data. Tencent slipped 3.5% as fears of more regulations clouded a quarterly profit jump. MSCI’s index of EM shares touched lows last seen in December, with losses between 0.3% and 2.7% among major indices in emerging Europe, Middle East and Africa also weighing. Eyes are also on a high-level meeting under way in Beijing to discuss China’s planned imposition of anti-sanctions law on global financial hub Hong Kong. In a rare bright spot, bonds issued by China Huarong Asset Management jumped after the troubled bad loan company announced a state-backed rescue plan. Huarong is the sixth-biggest issuer in the entire JPM corporate EM bond Index . Sri Lanka sovereign dollar bonds surged after the central bank on Thursday became the first in Asia to raise interest rates since the pandemic began. Regarding finances in Afghanistan, the International Monetary Fund on Wednesday said it suspended Afghanistan’s access to IMF resources due to a lack of clarity over the country’s government. 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 and Tom Arnold in London; Editing by Kim Coghill Our Standards: The Thomson Reuters Trust Principles.