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LONDON, Sept 16 (Reuters) - Emerging equities continued their nosedive on Tuesday to their worst since 2006 as markets digested the collapse of Lehman Brothers and spiralling risk aversion led to investors liquidating perceived risky assets.

Worries emerging economies were becoming increasingly exposed to a global downturn, falling commodity prices, a resurgent dollar and Russia's war with Georgia had been pounding emerging markets even before Lehman filed for bankruptcy on Monday.

Markets were looking to a Federal Reserve meeting later in the day as well as third-quarter earnings from Goldman Sachs <G.N>, with worries continuing over the health of investment banks a day after Bank of America agreed to buy Merrill Lynch.

Attention is focusing on insurer American International Group, with investors worrying it could be the next giant to fall.

While the worries may be over U.S. institutions, with American investors putting their cash back home, emerging markets are amongst the hardest hit, with many investors pulling assets regardless of local fundamentals.

"Emerging markets are under great strain," said BNP Paribas emerging market strategist Elisabeth Gruie. "There is still a flight to quality and risk aversion... markets are having difficulty finding their bearings ahead of the (Fed). No investors want to hold onto positions for too long."

Investors will be paying close attention particularly to illiquid and shallow markets such as Central Europe in the coming weeks and months as administrators unwind Lehman's positions, possibly sparking savage moves Local market reports Central and eastern Europe Romania Turkey Czech Republic South Africa Slovakia Spot FX rates Eastern Europe spot FX Middle East spot FX Asia spot FX Latin America spot FX Other news and reports World central bank news Economic Data Guide Official rates Emerging Diary Top events Diaries Diaries Index

tf.TFN-Europe_newsdesk@thomson.com

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