* Stocks down 0.4%, FX flat

* Equities in Greece, Czech Republic, Hungary up over 1%

* Hungarian forint leads regional currency decline

* JPM data shows EM equity outflows worsened to $5 bln

last week

By Twesha Dikshit

March 20 (Reuters) - Emerging market stocks ticked lower

on Friday, with a retreat in oil prices soothing some investor

nerves after the U.S. and its allies offered to join efforts to

secure passage through the Strait of Hormuz and boost global oil

supply.

The war in the Middle East has upended markets and sent oil

prices soaring as attacks on energy infrastructure along with

supply concerns have added to inflation worries.

In a week filled with central bank meetings, most

policymakers opted to keep rates steady, while saying they were

on alert to tighten monetary policy to deal with inflation if

necessary.

Traders no longer expect a rate cut from the U.S. Federal

Reserve this year, and bets of hikes from the Bank of England

and the European Central Bank have firmed.

The MSCI emerging markets equity index dipped

0.4%, while a gauge for currencies was flat.

Both indexes were set to end the week little changed after a

sharp pullback in the two weeks since the U.S.-Israeli war on

Iran began.

"Despite recent volatility from geopolitical tensions and

higher oil prices, we maintain our constructive outlook on EM

equities as fundamentals remain resilient and history shows such

shocks are typically short-lived," UBS analysts said in a note.

They said their preferences included mainland China, China's

tech sector, India, South Korea, Brazil, Malaysia and Indonesia.

MARKETS MIXED AS MIDDLE EAST WAR DEVELOPMENTS MONITORED

Stock indexes in emerging Europe were higher, with those in

Greece, the Czech Republic and Hungary

adding between 1.1% and 1.4%.

Czech President Petr Pavel signed the 2026 budget into law,

replacing the provisional plan in place despite concerns over

the amount of defence spending planned, his office said. The

crown ticked lower against the euro.

Meanwhile, the EU will find ways to pay out the promised

loan of 90 billion euros ($104.2 billion) to Ukraine despite

Hungary's continued resistance, Commission President Ursula von

der Leyen said.

EU leaders voiced frustration with Hungary's Viktor Orban,

who has cited a dispute over a war-damaged pipeline to block the

loan. Ukraine's international bonds suffered their biggest fall

since the start of the year on Thursday, with many maturities

down around 2 cents.

Turkey's benchmark index dropped marginally while

South Africa's gained 1.6% after a large fall in the

previous session.

Regional currencies were mostly lower against the euro, with

the Hungarian forint remaining under pressure and last

down 0.9%.

In the Middle East, bourses were mixed, with those in Egypt

and Oman adding 3.4% and 1.3%, respectively.

Indexes in Qatar and Bahrain were lower.

BofA Global Research flow data showed that EM equity

outflows resumed to $4.8 billion. For debt, the figure amounted

to $3.3 billion over the past two weeks.

J.P.Morgan data showed EM equity outflows worsened to $5

billion from $3.1 billion last week. Asia ex-Japan continued to

see a heavy selloff, while EMEA outflows narrowed significantly

and LatAm saw inflows after last week's brief selloff.

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