UPDATE 2-South Africa's rand hits one-week low on EM woes; stocks dip on MTN

* Rand hit by Argentina, Turkey woes

* Stocks snap 10-session rally as MTN saga weighs (Updates rand, stocks, bond closing prices)

JOHANNESBURG, Aug 30 (Reuters) - South Africa’s rand tumbled to its weakest in more than a week on Thursday as financial crises in Turkey and Argentina rattled sentiment toward emerging markets and stoked another wave of selling on the local currency.

Stocks fell as mobile operator MTN slid as much as 23 percent after Nigerian authorities ordered the South African telecoms group to return $8.1 billion.

At 1520 GMT the rand was down 2.28 percent to 14.6850 per dollar, its weakest since Aug. 20.

“The entire EM is a sea of red,” said currency trader at Rand Merchant Bank Jan Sluis-Cremer.

“The rand’s being dragged down by other emerging markets. We saw Argentina implode overnight and that’s sparked some selling across the board and it seems like the rand is being used as a proxy hedge,” said Sluis-Cremer.

The Argentine peso crashed over 7 percent after a investor confidence there collapsed following its request to the International Monetary Fund (IMF) to speed up disbursement of a $50 billion loan programme.

Sentiment towards emerging markets was also hurt by Turkey’s ongoing financial crisis, and the lira was amongst the hardest hit by the fresh bout of investor nervousness, diving to a two-week trough.

Concerns over the health of the domestic economy also put pressure on the currency. South Africa’s budget deficit in July increased to 95.98 billion rand from 92.21 billion rand shortfall a year ago, Treasury data showed.

Government bonds also weakened, with the yield on the benchmark paper due 2026 up 10 basis points to 9.04 percent.

On the bourse, the Top-40 index was down 2.55 percent to 52,650 points while the broader all-share index slipped 2.3 percent to 58,803 points.

MTN closed 19.41 percent at 86.50 rand.

Nigeria’s central bank said $8.1 billion had been illegally moved abroad because the company’s bankers, who include South Africa’s Standard Bank’s Nigerian unit Stanbic , had failed to verify that Africa’s biggest telecoms company had met all the foreign exchange regulations.

Standard Bank denied any wrongdoing. Its shares fell 2.4 percent to 185 rand. (Reporting by Mfuneko Toyana and Nomvelo Chalumbira Editing by James Macharia)