*

Vietnam cenbank says it stands ready to intervene in FX

market

*

S.Korea to take decisive action if needed to stabilise FX

market

*

Indonesian cenbank intervenes "more boldly" as rupiah

drops

*

S&P cuts Israel's credit rating on heightened geopolitical

risk

*

Emerging market stocks down 1.6%, FX off 0.3%

By Bansari Mayur Kamdar

April 19 (Reuters) - Emerging market stocks and

currencies fell on Friday, heading for their second weekly loss

as investors ditched riskier assets after a reported Israeli

attack on Iran stoked Middle East tensions.

The MSCI index for emerging market stocks fell

1.6%, while currencies dipped 0.3% by 0820 GMT,

after Israel reportedly launched an attack on Iranian soil, in

the latest tit-for-tat exchange between the two arch foes.

Israel has not claimed responsibility for the strike.

"Give that today is a Friday and market will be jittery over

any developments over the weekend, we are likely to see a push

towards risk aversion and degrossing as investors try to reduce

risk before the weekend," said Mohit Kumar, chief Europe

economist for Jefferies, in a note.

"Geopolitical premium is here to stay for the near term. We

remain still hopeful that the current conflict will not escalate

further and the broader impact can be contained."

Ratings agency S&P Global on Thursday downgraded Israel's

long-term ratings to A-plus from AA-minus as tensions with Iran

heightened last weekend and amidst the already elevated

geopolitical risks for Israel.

However, Israel's shekel rose 0.4% against the dollar

Elsewhere in emerging markets, South Africa's rand

eased 0.5% against the dollar and Russia's rouble weakened.

Currencies in Central and Eastern Europe were mixed against

the euro, with the Polish zloty and Czech crown

edging higher and the Hungarian forint

sliding 0.2%.

In Asia, Indonesia's rupiah hit a fresh four-year low

against the greenback with an official saying the Indonesian

central bank is in the market "more boldly to maintain market

confidence".

South Korea's finance ministry and Vietnam's central bank

deputy governor echoed this sentiment and said they were ready

to take action to respond to excessive volatility in their

foreign exchange markets.

Asian equities didn't fare much better, with stocks in

Bangkok, Seoul and Manila all falling

more than 1% each, while Mainland China and Hong Kong stocks

also closed lower.

Stocks in Taiwan shed 3.8%, with TSMC

dropping 6.7% after the world's largest contract chipmaker

dialled back its expectations for chip sector growth and did not

revise up its capital spending plans, contrary to expectations.

India kicked off the world's largest election on Friday.

Pakistan hopes to agree the contours of a new International

Monetary Fund loan in May, Finance Minister Muhammad Aurangzeb

told Reuters, and has begun talks with ratings agencies to lay

the groundwork for a return to international debt markets.

Nigeria has halved federal borrowing from the central bank,

according to Finance Minister Wale Edun.

HIGHLIGHTS:

** Chinese investors flock to convertible bonds as yields

plummet

** Malaysia economy likely grew 3.9% y/y in Q1 - advance est

** Turkish economy on right track, monetary policy fully

functional: Finance Minister