* EM stocks down 2.1 pct, 2.17 pct would be biggest since mid 2015
* China bounces on Beijing support, Hong Kong hammered
* Central and eastern European stocks hit 3-month low
* Malaysia riggit falls to new low on PM corruption claims
By Marc Jones
LONDON, July 6 (Reuters) - Emerging market stocks flirted with their biggest fall in two years on Monday as fears that Greece could be heading back to the drachma reached fever pitch, China remained volatile and Fed minutes this week kept U.S. rate jitters simmering.
MSCI's benchmark emerging market index was down more than 2 percent by the time European investors had fully digested Sunday's overwhelming Greek vote against EU-prescribed austerity measures that could set it on a path out of the euro.
Most of the damage, however, had been done in Asia where Hong Kong slumped over 3 percent despite a 2.5 percent bounce in China after the latest salvo of support measures from Beijing.
The falls in central and eastern Europe's main bourses were more muted in comparison, with Poland and Hungary 0.9 and 1 percent lower and the Czech Republic down 0.6 percent although they left the region at a new three-month low.
Bond and foreign exchange market reaction to Greece's troubles was also controlled. Yields and spreads across the CEE bloc rose but were comfortably below recent highs while currencies dipped but stayed above their latest lows.
"The reaction (to Greece) we are seeing on EM currencies is relatively muted. People still believe a deal will get done so they are not treating it as a completely risk-off scenario," said Dominic Bunning, a senior FX strategist at HSBC.
"The situation has been rolling on for a while and people have been bearish on emerging FX so we are not seeing a real follow through."
Stocks remained the big pressure point though. Anything more than 2.17 percent fall will make it the sharpest drop on the MSCI EM index since a 4 percent slump in June 2013.
Malaysia had also remained in focus in Asia as the ringgit tumbled to a 16-year low and stocks in Kuala Lumpur fell over 1 percent as fresh corruption claims hit the country's prime minister Najib Razak.
The ringgit is the worst-performing Asian currency so far this year with an 8.1 percent loss against the U.S. dollar.
Elsewhere, the South Korean won hit a near four-month low of 1,128.0 on the dollar as Seoul shares lost 2 percent on the back of foreign selling. Indonesia's rupiah slid 0.3 percent to 13,358 on dollar demand from importers for payments.
"This is not simply because of risk aversion from Greece, but more importantly because, various Asian currencies had pre-existing negative drivers," said Heng Koon How, Credit Suisse Private Bank's senior currency strategist in a note.
Given the turmoil emanating from Greece, emerging market investors are mulling weather the U.S. Federal Reserve would still pull the trigger on a rate hike this year. The minutes of the U.S. central bank's June meeting will be released on Wednesday.
For GRAPHIC on emerging market FX performance 2015, see link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2015, see link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2015, see link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2015, see link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see ) (Additional reporting by Sujata Rao in London and Jongwoo Cheon in Singapore; Editing by Toby Chopra)