EMERGING MARKETS-Tech tumble, climbing U.S. yields knock emerging markets

By Karin Strohecker

LONDON, April 20 (Reuters) - Emerging markets ended the week on a sour note with tech stocks taking a tumble following a warning over smartphone demand while steadily climbing U.S. yields and a stronger dollar weighed on currencies.

MSCI (Frankfurt: 3HM.F - news) 's emerging market benchmark snapped a three day winning streak to fall 1 percent, dragged lower by a more than 2 percent drop in emerging IT stocks.

The losses came in the wake of the world's largest contract chipmaker Taiwan Semiconductor Manufacturing cutting its revenue target to the low end of forecasts and blaming softer demand for smartphones, which sent its shares tumbling more than 6 percent.

Meanwhile emerging currencies also suffered as the dollar index traded at its highest in nearly two weeks, with rising inflation expectations lifting U.S. Treasury yields which had climbed steadily over the week and hovered near a one-month high hit on Thursday.

"The important thing to note is the rise in U.S. long term yields again after the yield curve flattening concerns have dominated markets for some time," Inan Demir, senior emerging economist, Nomura International.

"This is a key pressure point for emerging markets with large external financing needs, some of these markets, and I'm thinking of Turkey especially here, are also vulnerable to the rise in oil prices."

Russia's rouble chalked up some of the biggest losses of the day, weakening 0.8 percent after the Finance Ministry resumed forex purchases to replenish state reserves.

But South Africa's rand and Korea's won eased around 0.3 percent. However, thanks to gains earlier in the week all were on track for weekly gains.

Meanwhile Mexico's peso, treading water on the day, was on track to rack up a 2 percent loss over the week - the biggest such fall since December. Mexican markets were spooked by the strong performance in opinion polls by leftist Andres Manuel Lopez Obrador. A late Wednesday poll by polling firm Mitofsky showed Obrador pulling further ahead of his rivals in the run-up to the July 1 presidential election.

For GRAPHIC on emerging market FX performance 2018, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2018, see http://tmsnrt.rs/2dZbdP5

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For CENTRAL EUROPE market report, see

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For RUSSIAN market report, see) (Reporting by Karin Strohecker Additional reporting by Claire Milhench Editing by Peter Graff)