April 24, 2018 / 9:25 AM / a month ago

EMERGING MARKETS-Emerging FX bounce on softer U.S. yields, tech stocks suffer

LONDON, April 24 (Reuters) - Retreating U.S. Treasury yields and stronger commodity prices helped emerging currencies bounce back on Tuesday but equities were treading water with technology stocks suffering amid increasing concerns over smartphone demand.

Emerging currencies were breathing a sigh of relief after U.S. Treasury yields capped four days of falls that had pushed 10-year yields closer to the key psychological barrier of 3 percent — a level not seen since early 2014.

Adding to the upbeat mood were commodity prices, with oil futures breaking through $75 dollars a barrel for the first time in nearly 3-1/2 years and copper jumping 1 percent.

Russia’s rouble, Turkey’s lira and South Africa’s rand all snapped three-day losing streaks to strengthen 0.5 percent.

“They are coming back from weak levels,” said Guillaume Tresca, an emerging markets strategist at Credit Agricole, adding that the spike in U.S. yields had kept emerging markets on the back foot in recent days.

“Despite the fact that trade tariffs and North Korea concerns have eased, everybody is focused on the long-term U.S. rates and investors fear that they could break the 3 percent level so we have seen some dollar strengthening,” he said.

Meanwhile stocks painted a less rosy picture.

The MSCI emerging markets information technology index dropped more than 1 percent to its lowest since early April in a third straight day of losses. The index was dragged lower by hefty falls among semi-conductor producers, with Taiwan-based WIN Semiconductors Corp tumbling nearly 10 percent.

The losses came in the wake of a number of warnings about smartphone demand. South Korean chipmaker SK Hynix Inc became Asia’s second major semiconductor maker this earnings season to warn of slower growth in smartphone chip sales, while Austrian peer AMS warned of a downturn owing to weaker orders from one of its main customers. .

MSCI’s broader emerging markets index traded only a touch softer, however, thanks to gains in bourses from Moscow to South Africa.

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

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For CENTRAL EUROPE market report, see

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For RUSSIAN market report, see) Emerging Markets Prices from Reuters Equities Latest Net Chg % Chg % Chg

on year

Morgan Stanley Emrg Mkt Indx 1158.32 +0.06 +0.01 -0.01

Czech Rep 1127.26 +5.79 +0.52 +4.55

Poland 2300.86 +9.27 +0.40 -6.52

Hungary 38391.93 +268.48 +0.70 -2.50

Romania 8968.73 +11.70 +0.13 +15.67

Greece 837.96 -0.67 -0.08 +4.44

Russia 1158.23 +13.57 +1.19 +0.33

South Africa 50981.64 +103.66 +0.20 -2.95

Turkey 10347.24 -585.24 -0.53 -4.32

China 3128.60 +60.59 +1.97 -5.40

India 34612.29 +161.52 +0.47 +1.63

Currencies Latest Prev Local Local

close currency currency

% change % change

in 2018

Czech Rep 25.43 25.43 -0.04 +0.37

Poland 4.20 4.20 +0.04 -0.57

Hungary 312.31 312.14 -0.05 -0.57

Romania 4.65 4.66 +0.04 +0.50

Serbia 118.11 118.05 -0.05 +0.25

Russia 61.58 61.86 +0.45 -6.38

Kazakhstan 325.76 327.96 +0.68 +2.16

Ukraine 26.10 26.10 +0.00 +7.84

South Africa 12.26 12.35 +0.73 +0.79

Kenya 99.90 99.79 -0.11 +3.20

Israel 3.54 3.54 +0.05 -1.83

Turkey 4.08 4.11 +0.58 -7.21

China 6.30 6.32 +0.19 +3.21

India 66.34 66.52 +0.27 -3.78

Brazil 3.45 3.45 +0.00 -4.06

Mexico 18.87 18.94 +0.40 +4.15

Debt Index Strip Spd Chg %Rtn Index

Sov’gn Debt EMBIG 320 0 .13 7 86.84 1

Reporting by Karin Strohecker; Additional reporting and graphic by Claire Milhench; Editing by Catherine Evans

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