EMERGING MARKETS-Emerging market assets rise as US signals Iran peace deal

* Hungarian forint nears multi-year highs

* India may allow fiscal deficit to widen to 4.8% of GDP, Bloomberg News reports

* Oil prices slip over 4%

By Avinash P

June 12 (Reuters) - Emerging market assets gained on Friday after U.S. President Donald Trump signalled a deal to end the Iran war could be signed as soon as this weekend. The prospects of an imminent end to the three-month-old conflict pushed oil prices to a two-month low, somewhat easing concerns about inflationary pressures.

"The emerging markets, particularly South Asia and Southeast Asia, are particularly exposed to oil prices and exports from the Middle East. So any relief there will have an outsized impact on them as opposed to Europe or the U.S.," said Michael Field, chief equity strategist at Morningstar.

However, it remains to be seen if a deal will be confirmed. Investors hoping for a quick end to the conflict have been caught wrong-footed by false dawns in the past.

MSCI's index tracking EM stocks jumped 3%, with Asian heavyweights South Korea and Taiwan gaining 4.6% and 2.4%, respectively. Bonds in Saudi Arabia, UAE and Egypt rallied. For the week, the EM index, however, could still end in the red after the period saw Washington and Tehran exchange tit-for-tat strikes, and an AI-linked selloff. Stock markets across Asia advanced on Friday, with Chinese benchmarks adding 1.1% each while Indian equities were up.

Currencies were mostly higher against the U.S. dollar , which was little changed. Indonesia's rupiah appreciated 0.6%, and India's currency rose 0.8%.

MSCI's gauge tracking EM currencies gained 0.5% and was headed for a small weekly gain. Turkey's central bank sees CPI at the end of 2026 at 29.14%, a survey showed. The monetary authority left its key interest rate at 37% on Thursday, as was expected.

Local stocks gained 2.5%, while the lira firmed against the dollar.

In Africa, South African shares added 2.2%, while the rand was steady.

Central European currencies were largely subdued against the euro. The Hungarian forint firmed 0.1% and was hovering near multi-year highs.

Local equities ticked higher with Warsaw's and Budapest's benchmark indexes jumping 2.3% and 1.5%, respectively.

HIGHLIGHTS:

** Bank of Korea governor says interest rates to be raised 'on time' ** Beijing's investment clampdown clouds outlook for Hong Kong banks, insurers ** India willing to let fiscal deficit widen to 4.8% of GDP, Bloomberg News reports

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For RUSSIAN market report, see (Reporting by Avinash P in Bengalauru; Editing by Harikrishnan Nair)