* MSCI EM stocks up 2.3%, FX stable

* Asian tech-heavy bourses bounce back

* Hungary, Nigeria rate call later in the day

By Utkarsh Hathi

July 21 (Reuters) - Emerging market equities bounced off

recent lows on Tuesday after reports of U.S.-Iran mediation

triggered a retreat in oil and relief rally in equities, while

currencies were mixed against a steady dollar.

Oil prices eased as traders weighed reports of mediation

efforts between the U.S. and Iran against an exchange of fresh

attacks between the two and threats of a naval blockade of Saudi

Arabia by Yemen's Houthis, announced on Monday.

Iran had received a proposal from mediators for a 10-day

ceasefire in efforts to salvage the deal between both countries

signed about a month ago, according to a senior Iranian

official.

"Investors are sort of learning to live with oil prices at

these levels. They've seen higher levels earlier in the year,"

said Chris Turner, global head of markets at ING.

MSCI's global EM stocks index gained 2.3%,

rebounding from over two-month lows, while the currencies gauge

edged 0.04% higher against the U.S. dollar.

South Korean shares closed 3.6% higher, recouping

almost all the previous session's losses. The country's equity

benchmark had dropped more than 10% in the last two days, led by

chipmakers SK Hynix ( SKHY ) and Samsung as it

bore the brunt of wild swings in semiconductor stocks.

Analysts expect volatility heading into earnings season, as

market participantsweigh up whether quarterly results can

justify lofty valuations in the tech sector.

Taiwan's tech-heavy stock index and Chinese equities

gained 4.2% and 3.1%, respectively.

The relief rally also spread to Europe, with MSCI's index

tracking Central and Eastern Europe rising 2%.

Polish and Hungarian benchmark indexes gained 1%

and 2%, respectively, while Romanian equities rose

1.3%.

Turkish equities slipped 0.2% while the lira

was little changed.

Most Asian currencies were rangebound, while those in

emerging Europe saw muted trade. Poland's zloty was

trading at its lowest since November 2024.

Hungary's forint was firm ahead of its central

bank's monetary policy decision later in the day, where it is

widely expected to deliver a quarter point rate cut. Hungary's

central bank delivered a similar reduction last month, after

trimming its inflation forecast.

"There's a very strong interest from investors in the

Hungary story, particularly looking at the kind of the

medium-term potential of euro entry after 2030," added Turner.

South Africa's rand edged 0.6% higher as crude prices

eased, while the country's stocks advanced 0.6%,

tracking precious metal prices.

Elsewhere, the International Monetary Fund said on Monday

that Ukraine had maintained macroeconomic and financial

stability despite the war with Russia, and cleared the way for

immediate access to financing of about $690 million.

An interest rate decision from Nigeria's central bank is

also expected later in the day.

HIGHLIGHTS:

** Indonesia to issue $1 billion panda bond sale on July 23

** China considers tighter export controls on AI models and

chips, FT reports

** South Korean economy likely slowed in Q2 after robust Q1

growth: Reuters poll

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For TURKISH market report, see

For RUSSIAN market report, see