* EM FX index down for fourth straight session * S.African rand down for sixth straight session * Local currency EM yields rise 5% * Fitch downgrades Huarong Aug 11 (Reuters) - Emerging market stocks fell on Wednesday while currencies eased for a fourth straight session, as rising cases of the COVID-19 Delta variant and a firmer dollar ahead of U.S. inflation data dented investor sentiment. Most Asian currencies were in negative territory. South Africa’s rand shed 0.2% in its sixth straight session of losses, while Turkey’s lira slipped 0.3% a day ahead of a key central bank meeting. Daily coronavirus cases in Turkey neared their highest in three months. The dollar gained traction ahead of U.S. inflation data due at 1230 GMT. A strong reading could push bond yields and the dollar higher again as it will boost bets that the Federal Reserve might start tapering its stimulus soon. Local currency EM yields rose 5% but spreads were down with Treasuries rising. MSCI’s index of emerging market stocks slipped 0.3%. But gains in the Shanghai composite index, Hong Kong and Moscow helped limit losses. MSCI’s china index hit a near two-week high even as China’s daily new COVID-19 case count reached a seven-month high on Tuesday, indicating that the current outbreak is still not fully contained. The EM index has declined about 10% from 2021 peaks, thanks largely to falls of about 18% in Chinese tech giants Alibaba and Tencent due to a government crackdown on the sector. “Nevertheless, these companies are still going to be doing quite well and be making money... we’ve probably reached the bottom of price declines in those companies,” Mark Mobius, EM fund manager at Mobius Capital Partners, told the Reuters Global Markets Forum, adding that other markets, particularly India, have been doing well. On the debt front, Fitch Ratings downgraded Huarong Industrial Investment & Management Co, a unit of bad loan company Huarong Asset Management, a few notches further into junk on lack of a refinancing plan for its debts maturing in 2022. Earlier in the year, JPMorgan had noted if Huarong faltered, it could call into question the implicit support and rating methodology for China state-owned enterprises, which could see the market reassess $83 billion of Chinese bonds that have credit protection. Huarong, the sixth-biggest issuer in the entire JPM corporate EM bond Index, has $22 billion of dollar-denominated bonds in total. According to JPM, $18 billion are in the Asia credit JACI index. On Thursday, the central banks of Turkey and the Philippines are both expected to hold their key interest rates, whereas Peru and Mexico are seen hiking. Reporting by Susan Mathew; additional reporting by Aaron Saldanha and Supriya Rangarajan in Bengaluru; Editing by Subhranshu Sahu Our Standards: The Thomson Reuters Trust Principles.