EMERGING MARKETS-FX, stocks steady as investors tiptoe around fragile Middle East truce

By Purvi Agarwal

June 25 (Reuters) - Most emerging market stocks and currencies were stable on Wednesday as investors digested the fragile Israel-Iran ceasefire that brought some relief to rattled markets.

The ceasefire brokered by U.S. President Donald Trump appeared to be holding, a day after Israel and Iran both signalled that their air war had ended, at least for now.

Assets in the Middle East were mixed. Israeli stocks .TA125 were up 0.2%, hovering around a record high hit on Tuesday. The shekel IRS= retreated 0.1% from a more than two-month high.

Turkey's lira TRYTOM=D3 slipped 0.3% against the dollar, while its stocks .XU100 were flat. Saudi Arabia's equities .TASI were 0.2% higher, set to extend their rise to a fifth session, their longest winning streak since December.

"Markets are digesting the news that the situation in the Middle East seems to have improved with the ceasefire, so markets are still in much of a wait and see mode," said Giulia Bellicoso, markets economist at Capital Economics.

"Even before the ceasefire, our view was that this conflict would be solved fairly quickly and wouldn't affect the energy infrastructure too much, but there's still risk that things could escalate further."

The 12-day war had rattled many markets in the Middle East as it threatened to develop into a regional conflict and disrupt oil transportation through the vital Strait of Hormuz.

Meanwhile, the Turkish Treasury confirmed that it borrowed $2.5 billion in a five-year sukuk issue.

In South Africa, the rand ZAR= strengthened 0.1%, bringing its yearly gains to 5% against the dollar. Its benchmark stock index .JTOPI was down 0.1% on the day.

In emerging Europe, most currencies were flat against the euro. The Czech crown EURCZK= was little changed ahead of a local central bank interest rate meeting, where policy is widely expected to be kept on hold.

Data showed Poland's registered unemployment rate fell to 5.0% in May from 5.2% in April, in line with expectations.

Regional bourses dipped after gaining in the previous session, with those in Poland .WIG20 and Romania .BETI down 0.1% and 0.3% respectively.

MSCI's index of global EM currencies .MIEM00000CUS was 0.1% higher, while the stocks measure .MSCIEF jumped 0.9%.

Heavyweight Asian shares climbed on optimism surrounding the ceasefire. Shanghai stocks .SSEC closed at six-month highs as global risk sentiment improved. .SS

China's Premier Li Qiang said that he was confident the country could maintain a "relatively rapid growth rate" and transition from a manufacturing-led economy to a consumer-driven one.

After an index classification review, MSCI said late on Tuesday that Bulgaria would remain a 'standalone' market and the index provider would continue to consult on its reclassification as a 'frontier' market.

HIGHLIGHTS:

** Thai central bank holds rates steady, eyes tariffs, political tensions

** IMF says high tariffs would see Vietnam's growth slow to 5.4% this year

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