EMERGING MARKETS-Middle East tensions drag risk-sensitive stocks, FX down

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Vietnam cenbank says it stands ready to intervene in FX market

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S.Korea to take decisive action if needed to stabilise FX market

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Indonesian cenbank intervenes "more boldly" as rupiah drops

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S&P cuts Israel's credit rating on heightened geopolitical risk

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Emerging market stocks down 1.6%, FX off 0.3%

By Bansari Mayur Kamdar

April 19 (Reuters) - Emerging market stocks and currencies fell on Friday, heading for their second weekly loss as investors ditched riskier assets after a reported Israeli attack on Iran stoked Middle East tensions.

The MSCI index for emerging market stocks fell 1.6%, while currencies dipped 0.3% by 0820 GMT, after Israel reportedly launched an attack on Iranian soil, in the latest tit-for-tat exchange between the two arch foes.

Israel has not claimed responsibility for the strike.

"Give that today is a Friday and market will be jittery over any developments over the weekend, we are likely to see a push towards risk aversion and degrossing as investors try to reduce risk before the weekend," said Mohit Kumar, chief Europe economist for Jefferies, in a note.

"Geopolitical premium is here to stay for the near term. We remain still hopeful that the current conflict will not escalate further and the broader impact can be contained."

Ratings agency S&P Global on Thursday downgraded Israel's long-term ratings to A-plus from AA-minus as tensions with Iran heightened last weekend and amidst the already elevated geopolitical risks for Israel.

However, Israel's shekel rose 0.4% against the dollar

Elsewhere in emerging markets, South Africa's rand eased 0.5% against the dollar and Russia's rouble weakened.

Currencies in Central and Eastern Europe were mixed against the euro, with the Polish zloty and Czech crown edging higher and the Hungarian forint sliding 0.2%.

In Asia, Indonesia's rupiah hit a fresh four-year low against the greenback with an official saying the Indonesian central bank is in the market "more boldly to maintain market confidence".

South Korea's finance ministry and Vietnam's central bank deputy governor echoed this sentiment and said they were ready to take action to respond to excessive volatility in their foreign exchange markets.

Asian equities didn't fare much better, with stocks in Bangkok, Seoul and Manila all falling more than 1% each, while Mainland China and Hong Kong stocks also closed lower.

Stocks in Taiwan shed 3.8%, with TSMC dropping 6.7% after the world's largest contract chipmaker dialled back its expectations for chip sector growth and did not revise up its capital spending plans, contrary to expectations.

India kicked off the world's largest election on Friday.

Pakistan hopes to agree the contours of a new International Monetary Fund loan in May, Finance Minister Muhammad Aurangzeb told Reuters, and has begun talks with ratings agencies to lay the groundwork for a return to international debt markets.

Nigeria has halved federal borrowing from the central bank, according to Finance Minister Wale Edun.

HIGHLIGHTS:

** Chinese investors flock to convertible bonds as yields plummet

** Malaysia economy likely grew 3.9% y/y in Q1 - advance est

** Turkish economy on right track, monetary policy fully functional: Finance Minister

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Sharon Singleton)