Repeats with no changes to text

By Sruthi Narasimha Chari

May 27 (Reuters) - Stocks in South Korea and Taiwan soared to new record levels on Wednesday, driven by a staggering rally for chipmakers, while currencies in the region broadly held ground against a steady dollar and elevated oil prices.

Investors continued to look for clearer signs of progress in peace talks between Washington and Tehran, although fresh U.S. strikes on Iran earlier in the week dented optimism around a deal to end the conflict and reopen the Strait of Hormuz.

The MSCI index of EM Asia equities .MIMS00000PUS rose as much as 2.8% to a record high. South Korea .KS11 and Taiwan .TWII, which make up more than half of the index, advanced as much as 5% and 3%, respectively, to new all-time highs.

South Korea's SK Hynix 000660.KS surged 15% to join rival Samsung Electronics 005930.KS and Micron Technology MU.O in the $1 trillion market capitalisation club on an AI-driven rally.

Foreign investors have funnelled billions of dollars into AI-exposed equity markets like South Korea and Taiwan, lifting inflows in these emerging-market economies.

While South Korea's KOSPI index has almost doubled just this year, Taiwan's stock market .TWII is closing in on the fifth spot on the global market capitalisation list, powered by chipmaker TSMC 2330.TW, pushing the benchmark 55% higher.

Nvidia's NVDA.O plans to invest around $150 billion a year in Taiwan and its view of the region as the "epicentre" of the AI revolution could further boost foreign inflows there.

Among currencies, an MSCI index tracking global EM units .MIEM00000CUS inched higher. The South Korean won KRW=KFTC and Taiwanese dollar TWD=TP firmed between 0.2% and 0.5% against the dollar.

The Indian rupee INR=IN opened lower but held steady at around 95.77 a dollar, while the Thai baht THB=TH appreciated to 32.57 per dollar. The Singapore dollar SGD= also firmed slightly, nearing two-week highs.

The dollar index =USD slipped to 99.08 against a basket of major currencies, although uncertainty around a U.S.-Iran peace deal remains a major overhang.

"The markets are looking for the next breakthrough: the announcement of an actual peace deal between the U.S. and Iran. If we see a deal and energy prices trend lower, not to mention bond yields, emerging market assets can continue to climb," said Kyle Rodda, senior financial market analyst at Capital.com.

Elsewhere, India's Nifty 50 .NSEI opened little changed but drifted slightly lower, while Thai stocks .SETI rose about 1.4%, mainly driven by Delta Electronics Thailand DELTA.BK.

Markets in Indonesia, Malaysia, the Philippines and Singapore were closed for a public holiday.

HIGHLIGHTS:

** Japan's financial conditions loose despite rising yields, BOJ official says

** Japan's Nikkei hits record high as chip-related shares jump

** Taiwan suspects Nvidia chips smuggled to China via Japan, Bloomberg News reports

Asia stock indexes and currencies at 0417 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	+0.05	-1.61	.N225	0.8%	26.5%
China	CNY=CFXS	+0.08	+3.05	.SSEC	-1.11	3.29
India	INR=IN	-0.06	-6.13	.NSEI	-0.16	-8.63
Indonesia	IDR=	-	-6.22	.JKSE	-	-29.11
Malaysia	MYR=	-	+2.42	.KLSE	-	1.13
Philippines	PHP=	+0.03	-4.42	.PSI	-	-1.48
S.Korea	KRW=KFTC	+0.43	-4.08	.KS11	4.35	99.27
Singapore	SGD=	+0.05	+0.71	.STI	-	8.23
Taiwan	TWD=TP	+0.16	+0.12	.TWII	2.58	54.16
Thailand	THB=TH	+0.20	-3.50	.SETI	1.42	25.06