Updated at 0852 GMT

By Johann M Cherian

Sept 9 (Reuters) -Sentiment across most developing markets soured on Monday with Chinese stocks hitting a seven-month low as the economic outlook remained grim, while investors in Kenya parsed government proposals for fiscal reforms.

MSCI's gauge for equities in emerging markets .MSCIEF fell 1.2% to a one-month low, after finishing its second-straight week in losses on Friday, as economic growth worries in the United States weighed on appetite for riskier assets.

China's main indexes .CSI300, .SSEC lost over 1% each after data showed consumer inflation accelerated in August but fell short of expectations, while producer price deflation worsened.

Hong Kong stocks .HSI were down 1.4%, with rate-sensitive property shares .HSMPI falling 3.5% to a record-low. The yuan CNH= also weakened 0.4% and bond yields across the curve CN2YT=RR, CN5YT=RR, CN10YT=RR, CN30YT=RR slipped to record lows.

"The government and the Party continue to struggle to agree on reforms or launch a fiscal program that could support private consumption in China, this situation is not expected to change in the near future. Low (core) inflation in China is therefore likely to persist for some time," said a group of analysts at Commerzbank.

In Turkey, the lira TRYTOM=D4 and bond yields were flat, while an index tracking local banks .XBANK shed 1.2%. Ratings agency Fitch upgraded the country's long-term foreign-currency Issuer Default Rating to "BB-" from "B+", citing improved fiscal policy and better external buffers.

Meanwhile, Kenya's shilling KES= and bonds were little changed after the finance minister said he would seek suggestions from the public on new legislation to boost revenue, adding that he would cut taxes in the medium-term and avoid debt restructuring.

Recent attempts to raise taxes were met with deadly protests, forcing the government to withdraw the measures.

Russia's rouble RUB= and Ukraine's hryvnia UAH= were subdued against the backdrop of their more than two-year conflict.

Early vote counts from tightly controlled gubernatorial elections showed supporters of President Vladimir Putin and his war in Ukraine were set to win across Russia, including in Kursk where Ukrainian forces have seized control of some towns and territory.

Most currencies in central and eastern Europe were muted against the euro, but could see moves later in the week, following the release of local inflation reports and a likely quarter-point interest rate cut from the European Central Bank.

Elsewhere, Algeria's dinar DZD= was flat. The north African country's authorities declared Abdulmadjid Tebboune the overwhelming winner of presidential elections over the weekend.

Later in the week, investors will monitor a debate between Democrat Kamala Harris and Republican Donald Trump, the first between the two candidates ahead of the U.S. presidential election on Nov. 5.

Reporting by Johann M Cherian in Bengaluru; Editing by Emelia Sithole-Matarise

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