LONDON, Feb 23 (Reuters) - Emerging equities ended a choppy week with solid gains but currencies came under pressure as markets were fretting over the prospect of higher U.S. interest rates while investors in Russia awaited key sovereign ratings reviews on Friday.
MSCI's emerging markets equity benchmark were on track for daily and weekly gain of just over 1 percent - their second straight week of gains. Stellar gains in heavyweights Taiwan and South Korea lifted the benchmark.
China mainland stocks had a strong start on the day but gave away some gains after the government seized control of acquisitive financial conglomerate Anbang Insurance , in a dramatic move underscoring its intent to crackdown on financial risk. China also suspended the publication of a volatility index in a bid to curb speculative trading.
While investors had been fretting about how fast the Fed might raise rates in the wake of data showing a pick up in U.S. inflation, the premium demanded by investors to hold emerging debt over safe haven U.S. Treasuries barely budged over the week. However, an emerging markets client survey by J.P. Morgan found the asset class was seen as a pressure point.
"In an environment of rising U.S. rates, investors cited EM sovereign spreads (41 percent) as the most vulnerable EM asset classes," Michael Harrison wrote in a note to clients.
Many emerging currencies suffered as the dollar index looked to end the week nearly 1 percent stronger. Geopolitical woes haunted Turkey's lira, which was on track to weaken 1.6 percent since Monday after tensions were rising over Syria's north-western Afrin region, raising the prospect of a wider escalation of the conflict.
South African markets, which had enjoyed a moment in the sun following over Cyril Ramaphosa becoming president, took a breather as investors digested Wednesday's budget.
The rand looked set to weaken 0.5 percent since the start of the week, following two weeks of healthy advances. Local 10-year benchmark bond yields hovered just above 8 percent after testing that level earlier in the week. Stocks eyed a weekly loss of 1 percent, though that follows a near 6 percent jump last week.
Meanwhile investors in Russia were waiting to hear from ratings agencies Fitch and S&P Global about latest assessment of the country's creditworthiness later on Friday.
Analysts and officials have said the country may get a long-awaited upgrade to its sovereign ratings, with the focus on S&P Global, which has Russia's long-term foreign-currency rating one notch below investment grade at BB+.
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Reporting by Karin Strohecker; Editing by Toby Chopra