* MSCI EM FX down 0.1%, stocks up 0.8%

* China's yuan hits 3-year high amid Trump-Xi talks

* Turkey raises end-2026 interim inflation target

By Purvi Agarwal

May 14 (Reuters) - Most emerging market currencies were

subdued on Thursday while stocks were higher due to a boost from

Asian stocks rallying on AI euphoria, as markets awaited

outcomes from a summit between the U.S. and Chinese presidents.

MSCI's index tracking global EM currencies

was down 0.1% on the day, while the stocks gauge was

up 0.8%.

Markets cheered positive indications from the meeting

between U.S. President Donald Trump and his Chinese counterpart

Xi Jinping in Beijing.

The latter said trade talks were making progress but warned

that disagreement over Taiwan could hamper relations. Markets

are looking for any comments on the Iran war, even as Trump said

he did not expect to need China's help in ending the conflict.

China's yuan hit a three-year high against the dollar amid

the summit.

APPETITE FOR AI-LINKED STOCKS

"Historically, face-to-face summits involving the U.S.

president have tended to generate a slew of conciliatory

headlines, which can bolster risk assets," Francesco Pesole, FX

strategist at ING, said.

"In particular, any hints that China could play a more

active role in pressuring Iran towards a peace deal would likely

be well received."

Asian equities gained on investor optimism around artificial

intelligence. South Korea's Kospi rose 1.8%. Equities in

Taiwan and India also gained 0.9% and 1.5%

respectively.

Investor appetite for AI-linked stocks has pushed some Asian

bourses to record highs, while worries over the region's

reliance on Middle East energy has weighed on their currencies.

Stocks in emerging Europe were also higher, with ones in

Hungary and Romania up 0.1% each. Polish stocks

were up 1.3%.

Stocks in Turkey gained 0.5%, while its lira

was little changed. South African equities

were up 0.5% as gold prices edged up, but the rand was

flat.

Turkey's central bank raised its end-2026 interim inflation

target to 24% from 16%, Governor Fatih Karahan said, forecasting

that the inflationary effects related to the Iran war would

remain pronounced in the short term.

Most currencies in emerging Europe were subdued against the

euro, but the Hungarian forint weakened 0.7%.

Ukraine's bonds were trading around record highs, as

investors hoped for an end to the Russia-Ukraine war, following

Russian President Vladimir Putin saying over the weekend "I

think that the matter is coming to an end".

HIGHLIGHTS:

** Iran urges BRICS to condemn US, Israel for war, exposing

bloc divisions

** India's wholesale inflation quickens to 3-1/2-year high

of 8.3% as energy costs soar

** Thai economic growth likely slowed in first quarter on

tourism slump: Reuters poll

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