* MSCI EM FX down 0.2% on rising dollar

* South Korea's KOSPI falls over 3% on profit-booking

* Countries ramp up measures to tackle oil price spikes

* Turkish markets closed for holiday

By Purvi Agarwal

May 19 (Reuters) - Most emerging market currencies

weakened against a higher dollar on Tuesday but stocks broadly

rose as markets drew comfort from U.S. President Donald Trump's

comments on Iran, which raised expectations of an end to the

conflict.

Trump said on Monday he had paused a planned attack against Iran

after Tehran sent a peace proposal to Washington, and that there

was now a "very good chance" of reaching a deal limiting Iran's

nuclear program.

Oil prices slipped 2%, and risk appetite improved across

markets. Most Asian equity bourses were higher, with stocks in

Singapore hitting a record high.

"We're sort of in line with consensus in the conflict. Trump

is looking for an exit and an end to the conflict. Our base case

is that there will be some resolution at some point this year,"

said Mark Preskett, senior portfolio manager at Morningstar

Wealth.

"It's not really surprising that when there's a positive

announcement like last night, there's a renewed risk appetite in

stocks."

Hungarian and Romanian equities rose 0.3% and

1.3% respectively, while Polish stocks slipped 0.1%.

MSCI's index tracking global EM stocks fell 1.2%

to a two-week low, dragged down by the heavyweight South Korean

index, which lost 3.3% after an eye-popping rally as

investors booked some profits.

"With Korea, the moves are so pronounced, you get these

bouts of profit taking, and that's understandable especially

when Korea does remain reliant on Middle East oil and gas," said

Preskett.

"There's a risk factor there, but the underlying

fundamentals are still pretty strong."

Indonesia's stocks also fell 3.4%, and the rupiah

currency hit a fresh record low against the dollar, as

investors weighed the fallout of the conflict on the

energy-importing nation against Jakarta's spending plans and

market transparency.

Many countries have taken steps to cushion the blow from

elevated oil prices. Indian retailers raised prices by less than

a rupee per litre for the second time in a week. Protests broke

out in Kenya on Monday against the price hikes.

Thailand's cabinet approved new borrowing of 200 billion baht

($6.13 billion) to support a consumer subsidy scheme, to

alleviate the impact of the war on the cost of living.

On the FX front, the dollar index that measures the

greenback against a basket of major currencies gained 0.2%,

pressuring EM pairs. The MSCI gauge lost 0.2%.

South Africa's rand slipped 0.3% and stocks

lost 0.1% as gold prices inched lower. Gold is among the top

exports of the country.

Currencies in emerging Europe were subdued against the euro,

barring the Hungarian forint that weakened 0.4%.

Markets in Turkey were closed for a public holiday.

HIGHLIGHTS:

** China expected to keep benchmark lending rates steady amid

flush liquidity

** Japan, China lead declines in foreign holdings of Treasuries

in March, data shows

** Interest rates in Poland are not at an appropriate level,

central banker says

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