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 .MIEM00000CUS was down 0.1% on the day, while the stocks gauge .MSCIEF 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 .KS11 rose 1.8%. Equities in Taiwan .TWII and India .NSEI 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 .BUX and Romania .BETI up 0.1% each. Polish stocks .WIG20 were up 1.3%.

Stocks in Turkey .XU100 gained 0.5%, while its lira TRYTOM=D3 was little changed. South African equities .JTOPI were up 0.5% as gold prices edged up, but the rand ZAR= 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 EURHUF= 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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For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB