Emerging market stocks hit a near two-week high on Monday as new measures by China to shore up its stock markets lifted sentiment while currencies were muted ahead of a U.S. Federal Reserve policy meeting this week.

MSCI's index of emerging market equities was up 0.7% by 0939 GMT, touching its highest since January 16.

Hong Kong's Hang Seng index advanced 0.8%, propped up by strength in energy giants as oil prices gained after escalating distruptions to Red Sea shipping raised supply concerns..

In a boost to global sentiment, China's securities regulator said it will fully suspend the lending of restricted shares effective from Monday- the latest in a string of steps taken to stabilise the country's stock markets.

That offset concerns about a deepening property crisis stemming from a Hong Kong court's order to liquidate China Evergrande Group.

"It is expected that the process will have little impact on the company’s operation in the near term, including home construction," said Tommy Wu, senior economist at Commerzbank in a note.

"While the offshore liquidators could gain control over the company’s assets in Hong Kong, they could take months or years to take control over onshore assets in mainland China."

Stocks in mainland China struggled to make headway after a positive start to the session and eventually ended nearly 1% lower.

Equities in Turkey were at an over three-month high, last up 1.5%. Indian markets, were also among gainers.

A gauge of regional currencies was flat against a steady dollar.

Assets in emerging markets got a boost last week from China's policy support measures as well as data showing moderation in U.S. inflation. The focus now shifts to the Fed's policy verdict on Wednesday which will shape expectations for the timing of rate cuts.

The South African rand traded flat at 18.7695 per dollar and the Turkish lira stayed above 30 to the dollar.

Elsewhere, Hungary signalled its readiness on Monday for a compromise allowing a proposed European Union aid package for Ukraine to be financed from the bloc's budget ahead of an emergency summit on Thursday.

(Reporting by Amruta Khandekar; Editing by Angus MacSwan)