* Turkey, U.S. have not bridged differences - analyst * China, HK lead EM stocks decline after weak manufacturing data * Russian manufacturing expands, Turkey’s slows * Rand slumps in holiday trade; municipal elections underway Nov 1 (Reuters) - Emerging market shares fell for a fifth straight session on Monday as weak factory output data from China dented sentiment, while Turkey’s lira firmed after Ankara and Washington agreed to form a joint mechanism to strengthen ties. The lira outperformed EM peers, rising 0.7% after a 7.6% drop in October on tensions with the West and monetary policy uncertainty. U.S. President Joe Biden and Turkish President Tayyip Erdogan held talks in “a very positive atmosphere” on the sidelines of the G20 summit, a senior Turkish official said. Tensions between the two nations have ratcheted up over Turkey’s purchase of Russian defence systems, and human rights. Days after narrowly averting a diplomatic crisis over jailed philanthropist Osman Kavala, Biden told Erdogan his request for F-16 fighter jets had to go through a process in the United States, while Erdogan said his counterpart was “positive” towards the jet sale. But Credit Suisse analyst Berna Bayazitoglu warned that the readout suggested the two leaders had not been able to bridge their differences during the meeting. South Africa’s rand fell 0.8% in thin holiday trade as citizens started voting on Monday in municipal elections, with the ruling African National Congress facing discontent over poor services and stark inequality. Most other EM currencies fell as investors awaited the U.S. Federal Reserve’s two-day meeting set to end on Wednesday, with the bank expected to start tapering pandemic-related stimulus. “The (Fed) meeting this week has taper effectively priced in. Expectations are growing for some signal on rate hikes, although we think the (Fed) will still de-couple hikes from taper,” Mizuho analysts said. MSCI’s index of EM shares fell 0.4% with heavyweight China blue-chips and Hong Kong shares down 0.4% and 0.9%, respectively. Power shortages and rising costs weighed on production in Chinese factories last month, data showed, while leisure and tourism businesses are feeling the bite of the country’s zero tolerance for COVID-19. Factory activity in most other Asian economies grew. “Some divergence in growth trajectories between the U.S. and the rest of the world could continue to keep the USD supported on dips, especially ahead of the FOMC policy decision,” Maybank strategists said. Elsewhere, Russia’s manufacturing activity expanded in October for the first time since May, while it slowed in Turkey. Russia on Sunday reported 40,993 new COVID-19 infections, its highest single-day case tally since the start of the pandemic. Along with falling oil prices, the rouble hit over two-week lows. Russian stocks, however, snapped a four-session losing streak, lifted by a rally in financial and energy shares. Oil giant Saudi Aramco inched lower a day after it rose 0.4% on upbeat quarterly earnings. 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 Subhranshu Sahu