Updates for afternoon trade

By Rajasik Mukherjee

April 16 (Reuters) - Taiwan stocks rallied to all-time highs on Thursday, leading emerging Asian equities back to pre-Iran war levels, as optimism grew over a possible deal to end the conflict, with reports of Tehran potentially allowing shipping through the Strait of Hormuz boosting risk appetite.

The MSCI gauges tracking EM Asia equities .MIMS00000PUS and global emerging market stocks .MSCIEF rose more than 1% each, touching their highest levels since February 27.

Taiwan's stock index .TW11 rose over 1% to hit a record high of 37.135.55 points.

The index has gained nearly 30% so far this year on the back of surging demand for high-performance chips required for AI workloads.

Taiwan Semiconductor Manufacturing Co (TSMC) 2330.TW, the world's top contract chipmaker and Asia's most valuable firm, logged a 58% jump in quarterly profit to record levels, handily beating market expectations.

Positive sentiment from the equity market also spilled over to currency trading, with the Taiwan dollar TWD=TP rising 0.4%, touching its highest since March 3.

Inki Cho, a financial market strategist at global fintech firm Exness, said growth in the Taiwan dollar was underpinned by robust semiconductor and AI-related export inflows, adding that "broader USD weakness adds a further tailwind."

South Korea's KOSPI .KS11, another tech-heavy index in East Asia, surged over 2% to hit its highest since February 27.

Stocks in Thailand .SETI seesawed on Thursday, last trading 0.7% lower, following a long holiday.

The Bank of Thailand earlier in the day cut its growth forecast for 2026, saying Southeast Asia's second-largest economy faces slower growth this year due to the Middle East war.

"A lowered growth projection for Thailand could provide some support for Thai assets since it could lead to growing expectations of rate hold from the Bank of Thailand rather than the current market pricing of a rate hike," said Poon Panichpibool, a market strategist at Krungthai Bank.

Stocks in the Philippines .PSI gained as much as 0.6%, while those in Singapore .STI gave up early gains to trade slightly lower.

"Sentiment across Asia seems to be quite positive, which could be carried over from bullish sentiment in the U.S. market overnight due to hopes of a second round of peace negotiations between the U.S. and Iran," Panichpibool said.

In Peru, the sol PEN= depreciated sharply overnight to a more than one-week low, while MSCI's benchmark for Peru's share index .MIPE00000PUS tumbled more than 7% as uncertainties prevailed over the election outcome in the Latin American country.

Currencies in emerging Asia also staged a recovery on Thursday after a subdued showing in the previous session.

The Thai baht THB=TH appreciated as much as 0.5% on the day to 31.87 per U.S. dollar, the highest since March 12.

The South Korean won KRW=KFTC rose 0.2%, while the Philippine peso PHP= advanced 0.3%.

In contrast, the Indonesian rupiah IDR= slipped to a record low of 17,150 per U.S. dollar.

HIGHLIGHTS:

** China's Q1 economic rebound faces rough seas as Iran war jolts global outlook

** Hopes for Middle East peace grow with Israel and Lebanon eyeing ceasefire

** BOJ to hike rates by June as war-fuelled inflation risks mount

Asia stock indexes and currencies at 0722 GMT
COUNTRY	FX RIC	FX DAILY %	FX YTD %	INDEX	STOCKS DAILY %	STOCKS YTD %
Japan	JPY=	+0.09	-1.37	.N225	2.38	18.23
China	CNY=CFXS	+0.03	+2.51	.SSEC	0.70	2.18
India	INR=IN	+0.12	-3.63	.NSEI	-0.39	-7.63
Indonesia	IDR=	-0.06	-2.74	.JKSE	-0.03	-11.86
Malaysia	MYR=	-0.05	+2.63	.KLSE	0.10	0.29
Philippines	PHP=	+0.17	-1.88	.PSI	0.01	0.18
S.Korea	KRW=KFTC	+0.16	-2.28	.KS11	2.21	47.74
Singapore	SGD=	+0.06	+1.23	.STI	-0.20	7.86
Taiwan	TWD=TP	+0.42	-0.25	.TWII	1.12	28.20
Thailand	THB=TH	+0.28	-1.50	.SETI	-0.56	18.95