Dec 31 (Reuters) - Emerging market stocks broke a two-year winning run, but were set to end the last day of 2021 on a positive note on Friday boosted by China shares, while Turkey"s lira seesawed in thin trade after hefty losses this week. MSCI"s index of EM shares (.MSCIEF) rose 0.8% to three-week highs as China blue-chips climbed 0.4%, while battered Hong Kong shares (.HSI) jumped 1.2%. On the year, however, the Chinese indexes lost as a regulatory crackdown in the country had hammered heavyweight technology, internet and gaming stocks, while debt default risks at heavily indebted real estate developer China Evergrande Group (3333.HK) hurt the property sector. The broader EM index is on track to close about 4.5% lower on the year, compared with a more than 25% rise in the U.S. benchmark S&P 500 (.SPX). Turkey"s BIST index (.XU100) which surged more than 60% to record highs this year as stocks were rendered cheap by a lira fall and supported by looser monetary policy, was set to end the year up 27%. It cut a chunk of losses this month as investors lost faith in the central bank following continued unorthodox monetary policy demanded by the country"s President Tayyip Erdogan. Turkey"s lira moved between 13.0 and 13.4 this morning after sinking around 20% this week, giving back a chunk of last week"s more than 50% surge that followed some support measures by the central bank. But the interventions do not tackle the core problem, which should see the currency weaken further, analysts said. "Inflation will accelerate further amid claims that (central bank) policy rates will continue to decline, while other emerging markets are fighting inflation with often unprecedented rate hikes," said Marek Drimal, EMEA strategist at Societe Generale. "The lira is therefore likely to weaken further until credibility in inflation targeting picks up." The lira is set to end the year down about 43% - its worst year in two decades, and the worst performance among EM currencies. Lira timeline December 2021 Lira timeline December 2021 The U.S. Federal Reserve signalling tighter monetary policy next year and uncertainty around the coronavirus pandemic add to local pressures in emerging markets, such as an election in Brazil, new policies under a new government in Chile, geopolitical tensions in Russia, Ukraine and Belarus, among others. Russia"s rouble slipped further towards 75 a dollar after a call between President Vladimir Putin and U.S. counterpart Joe Biden yielded no deal to defuse tensions over Moscow"s military build-up near Ukraine. Putin warned against more U.S. sanctions. read more The rouble is down about 0.8% this year, with higher oil prices cushioning the fall for the exporter. Russian stocks (.IMOEX) gained 15% in 2021. South Africa"s rand was flat and looked to end the year down about 7%. South Africa said it passed the peak of its fourth COVID-19 wave and lifted a midnight to 4 a.m. curfew on Thursday. Emerging currencies in 2021 Emerging currencies in 2021 For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see https://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