* FX up 0.1%, stocks add 0.4%

* China's services activity grows but at slower pace - Caixin PMI

* Hungary's March industrial output shrinks, retail sales fall

* Russian rouble hits more than one-month high against dollar

* Ecuador frees cash for Galapagos with $1.6 bln bond repurchase

* IMF: Pakistan bailout review to conclude once financing in place

May 5 (Reuters) - Emerging market currencies extended gains for a third straight day on Friday, on track to end the week higher supported by a weakening dollar, while the Hungarian forint eased on fears of further contraction in the Central European economy.

Weighing on the U.S. dollar index and global risk sentiment, shares of U.S. regional banks continued to sink on fears of a crisis in the financial sector.

The MSCI's index for emerging market currencies rose 0.1% by 0817 GMT.

Hungary's forint slipped 0.1% against the euro on fears of a deeper recession after data showed industrial output fell much more than expected in March and retail sales plunged.

The Russian rouble surged to a more than one-month high beyond 77 against the dollar, ahead of a long weekend in Russia and as oil prices staged a partial recovery.

The South African rand eased 0.3%, while the Turkish lira inched down in the run up to elections on May 14.

"Given relatively stable spot USD/TRY, there is scope for greater two-sided volatility into and post elections, although FX forward rates have already been moving meaningfully weaker," strategists at Goldman Sachs said in a note.

Emerging market hard currency sovereign bond issuance fell 34% to $9.3 billion in April, after a rebound in March, according to Tellimer Research calculations using data from Bond Radar.

"The relatively subdued primary market activity was reflected in the lacklustre performance of EM sovereign bonds," said Stuart Culverhouse, head of fixed income research at Tellimer, in a note.

MSCI's emerging market stocks index advanced 0.4%, and was set to end the week higher.

Hong Kong stocks rose 0.4% after data showed China's services activity grew for a fourth consecutive month in April, while mainland China shares closed lower, dragged down by artificial intelligence-related companies.

Elsewhere in emerging markets, Colombia's Congress on Thursday approved a $247.4 billion four-year development plan, paving the way for the government of President Gustavo Petro to implement social and economic reforms.

The International Monetary Fund (IMF) is working with Pakistani authorities to conclude a ninth review of a bailout programme, its mission chief said, funding critical for the cash-strapped country to avert an economic collapse.

Credit Suisse repurchased Ecuadorean sovereign notes worth $1.6 billion in face value, the country's bankers said on Thursday, freeing cash for conservation of the unique Galapagos Islands in the biggest debt-for-nature swap ever struck.

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Conor Humphries)