EMERGING MARKETS-EM stocks fall after Middle East strikes, US data in focus

* Indonesian assets rise post the unexpected rate hike

* China's producer prices hit highest in nearly 4 years

* US CPI data due later on Wednesday

By Avinash P

June 10 (Reuters) - An index tracking emerging market stocks fell on Wednesday, dragged down by heavyweight Asian bourses as strikes by the United States and Iran tempered risk appetite and clouded prospects of a quick peace deal.

Iran's Revolutionary Guards said they had carried out missile and drone attacks on U.S. military bases in the Middle East on Wednesday after U.S. strikes on Iranian targets around the Strait of Hormuz. U.S. President Donald Trump said Iran had downed a U.S. Apache helicopter near the strait on Tuesday.

The clashes mark one of the biggest flare-ups in hostilities since a ceasefire was agreed in April.

Markets also awaited the latest U.S. inflation data, due later on Wednesday, hoping for clues about the Federal Reserve's policy path.

"A stronger-than-expected set of figures could echo what we saw on Friday following the U.S. jobs data, sending bond yields higher and stock prices lower. The moves could be just as sharp, depending on the data," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"The market is so crowded with bulls right now that even a small fear could turn into a nightmare."

The MSCI index of EM stocks fell 2.5%, with heavyweights South Korea and Taiwan slipping 4.5% and 3.3% respectively.

The index has traded lower in five of the last six sessions, with a pause in the AI rally adding to the gloom. It is still up nearly 19% for the year and has outperformed S&P 500's 7.9% rise.

Indonesia's assets, however, continued their ascent for a second straight session, a day after an unexpected off-cycle rate hike by Bank Indonesia to support the weakening currency surprised markets.

Local equities added 2.7%, while the rupiah appreciated 0.6% versus the dollar.

China's producer prices rose for a third straight month in May to the highest since July 2022, while consumer prices stayed elevated as energy prices stemming from the Iran war piled on cost pressures.

The Chinese stocks benchmarks declined 0.4% and 1.1% respectively. The yuan was little changed.

MSCI's gauge of EM currencies was off 0.2%.

Turkey's stocks fell 0.4%, while the lira firmed against the dollar.

In emerging Europe, the Hungarian forint was slightly lower against the euro but was hovering near four-year highs. Other major currencies were also trading lower.

Stocks in Poland fell 1.2%, while Hungary was down 0.7%. Romanian stocks were little changed.

Elsewhere, Ukrainian state energy firm Naftogaz said it has reached a preliminary agreement to restructure two Eurobond tranches worth 1.2 billion euros ($1.38 billion) due this year and in 2028.

HIGHLIGHTS:

** Kenya central bank holds key rate, monitors impact of oil prices on inflation ** Turkey opposition crisis deepens as rival CHP leaders hold duelling meetings ** Iran war drags India equity mutual fund flows to one-year low in May

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For RUSSIAN market report, see (Reporting by Avinash P In Bengaluru, Editing by Timothy Heritage)