* MSCI EM FX up 0.3%, stocks add 2.5%

* South Korea's KOSPI jumps 8% on Samsung boost

* Indonesian assets battered by elevated oil price

worries

* Turkey passes law to cut tax, give incentives for

manufacturing

By Purvi Agarwal

May 21 (Reuters) - Most emerging market currencies were

steady on Thursday and Asian stock indexes climbed on AI

enthusiasm, while markets awaited more clarity on a potential

peace deal between the U.S. and Iran.

MSCI's index tracking global EM stocks surged 2.5

%, recouping some lost ground from the last three sessions, led

by South Korea's benchmark KOSPI.

The tech-heavy bourse jumped 8.5%, driven by a more

than 8.5 % advance in Samsung Electronics ( SSNLF ) as the

chip giant signed a deal to avert a workers' strike.

Sentiment was also lifted by AI chip giant Nvidia's ( NVDA )

upbeat sales forecast, which pointed to persistent AI demand.

Taiwanese shares gained over 3 %.

In contrast, Indonesian assets underperformed markets, as

concerns over Jakarta's spending plans amid energy price

pressures from the Middle East conflict weighed.

The rupiah currency was trading at 17,600 per dollar,

while stocks fell 3.4 %. The central bank hiked interest

rates by an unexpected 50 basis points on Wednesday and the

government planned to centralize commodity exports in an effort

to help the economy.

"Markets are conceding a balance with resilient U.S. growth

and AI-driven optimism against rising geopolitical uncertainty,

fragmented global growth dynamics and increasingly complicated

central bank backdrops," said analysts at LMAX Group.

Meanwhile, Pakistan stepped up diplomatic efforts to hasten

U.S.-Iran peace talks, and President Donald Trump suggested he

could wait a few days for "the right answers" from Tehran but

was also willing to resume attacks on the country.

Oil prices rebounded on the uncertainty, and investors took

cues from how economies are positioned to weather elevated oil

prices, and their impact on households and companies.

"Markets are trying to de-trade a US-Iran peace deal...

Conviction is lower this time. Rhetoric from both sides remains

belligerent, and markets are more hesitant to chase optimistic

headlines after earlier disappointments," said Francesco Pesole,

FX strategist at ING.

Reuters reported that all major oil refineries central

Russia have been virtually forced to halt or scale back fuel

output following Ukrainian drone attacks, a development that

could push Russia to import fuel.

In emerging Europe, stocks in Hungary and Romania

gained 0.7% and 0.4% respectively, while ones in Poland

were flat.

Bourses in Turkey and South Africa were

off 1% and 0.3% respectively. The latter were pressured by a

slight decline in gold prices, among the country's exports.

On the FX front, the MSCI gauge was up 0.3%,

with the dollar index little changed.

Turkey's lira was little changed, while South

Africa's rand weakened 0.1% against the dollar.

Turkey's parliament passed a law that cuts corporate tax for

manufacturing companies, introduces incentives to repatriate

assets held abroad and extends tax advantages for financial

services exports, according to the legislation.

Currencies in emerging Europe were mostly subdued, but

Hungary's forint depreciated 0.6%, with elevated oil

prices weighing.

HIGHLIGHTS:

** Republic of Congo issues $850 million bond as part of

debt refinancing

** Moldova, IMF reach new agreement on non-financing support

instrument

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see