* Moody's cuts China credit outlook to "negative"

* South Africa's economy shrinks more than expected in Q3

* Turkish c.bank total reserves hit record high of $140 bln

* Stocks down 0.8%; FX off 0.2%

Dec 5 (Reuters) - Emerging markets stocks dropped on Tuesday with China equities tumbling to levels last seen in early 2019 following a ratings downgrade by Moody's, while South African stocks slipped after data showed the local economy contracted in the third quarter.

Heavy-weight China's blue-chip stocks and Hong Kong's Hang Seng index closed down 1.9% each, after ratings agency Moody's trimmed its outlook on China's government credit ratings to "negative" from "stable", citing lower medium-term economic growth and ongoing downsizing of the property sector.

"From Moody's side, what's challenging is the lower growth perspectives, both in terms of the debt overhang that's weighing on economic growth potential, but also foreign investors pulling out of China and the tightening of U.S. sanctions," said Jakob Ekholdt Christensen, senior EM strategist at BankInvest.

China equities are set for their third straight year in the red, and Hong Kong listed stocks on course for their worst year in over a decade if losses hold, as the economy struggles to gain footing following the pandemic and a crumbling property sector.

More broadly, MSCI's gauge for developing markets stocks fell 0.8% to a three-week low, while a basket of currencies dipped 0.2% against the dollar by 0943 GMT.

Meanwhile, South Africa's main stock index shed 0.6%, after data showed the local economy contracted 0.2% in the third quarter, on a seasonally-adjusted basis, compared with 0.5% growth in the previous quarter. Economists expected a 0.1% contraction.

India's main NSE Nifty 50 index gained 0.7%, notching a fresh record high with Adani Green Energy surging 20% after receiving a follow-on funding of $1.36 billion via a green loan from an international bank consortium to help the company expand its renewable power capacity.

Turkey's lira inched up to 28.91 to the dollar. The local central bank's total reserves rose to a record level exceeding $140 billion, five bankers' calculations showed, sustaining an uptrend after it adopted more orthodox monetary policy following May elections.

In central and eastern Europe, Poland's zloty slipped 0.1% to the euro ahead of a central bank monetary policy decision due on Wednesday. Economists foresee the regulator to hold benchmark rates at 5.75%, extending a pause in easing to two months.

Hungary's forint inched 0.2% lower. The country's minister for Economic Development, Marton Nagy, said that it is time to restore economic growth in the local economy even if it comes at the price of reaching the central bank's inflation target "a bit later". (Reporting by Johann M Cherian in Bengaluru; Editing by Sharon Singleton)