File picture: Alex Grimm

London - Emerging stocks fell on Monday as Chinese shares posted their biggest loss in seven weeks on worries about the property market, while Ukraine's debt insurance costs dropped sharply on expectations of western aid.

Ukraine said on Monday it needed $35 billion in foreign assistance over the next two years and appealed for urgent aid after President Viktor Yanukovich was forced out of office at the weekend.

In China, stocks slid around 2 percent after news reports stoked fears that banks have begun tightening loans to developers before next week's annual parliamentary meetings.

That fuelled worries about a slowdown in China's property market and growth outlook.

“People are having a more negative view about China's economy now than at the start of the year and it's still playing out,” said Peter Attard Montalto, emerging markets economist at Nomura.

The MSCI emerging equities index fell 0.34 percent though emerging sovereign debt spreads edged in by 1 basis point to 362 basis points over US Treasuries.

Ukraine's five-year credit default swaps (CDS) fell 161 basis points from Friday's close to a 3-week low of 946 bps, according to Markit.

“Political considerations in this instance override economic or financial ones and ... western aid is likely to be substantial enough to prevent a credit event from taking place in the short term,” Goldman Sachs said in a client note, referring to the risk of default or restructuring.

Ukraine's 2023 dollar bond rose 6 points to a four-week high of 90 cents on the dollar, according to Reuters data.

The 2017 dollar bond gained 7.8 points to a three-week high of 95, while the 2022 dollar bond rose 5 points to a three-week high of 90.

But the hryvnia fell to a five-year low. Analysts said the country is running out of foreign exchange reserves to support it and is likely to focus its use of funds on repaying dollar debt.

“Given that international reserves have likely, on our estimates, declined ... to $12-14 billion, we think downside risks to the UAH (hryvnia) remain large,” Goldman Sachs added.

Other emerging European currencies were generally steady, supported by the news from Ukraine.

The rouble hit a six-day high against the dollar.

Nigeria's naira fell 0.6 percent and stocks hit three-month lows in sustained weakness since President Goodluck Jonathan suspended graft-fighting central bank governor Lamido Sanusi last week.

Sanusi said on Friday he would go to court to challenge the suspension.

Egyptian stocks were trading at 5-1/2 year highs as the military-backed government resigned, in a move likely to pave the way for army chief Field Marshal Abdel Fattah al-Sisi to declare his candidacy for president.

Venezuela's five-year CDS eased but remain at extremely distressed levels above 2,000 bps, according to Markit, after nearly two weeks of violent anti-government protests that have killed at least eight people. - Reuters