* EM FX index up 0.4%, at two-month highs

* Philippine central bank holds rates at 6.5%

* EM stocks index rises nearly 1%

May 16 (Reuters) - A gauge for emerging market stocks advanced to its highest level in over two years on Thursday amid upbeat global sentiment following a tame U.S. inflation report, while most currencies in emerging Europe traded in a tight range.

Poland's zloty held steady at 4.26 per euro after rising for the last three sessions, while the Czech crown appreciated 0.2%, briefly touching a four-month high.

Hungary's forint fell 0.2% after rising for the last two days, while Romania's leu was last trading at 4.97 per euro.

Most bourses in Central Eastern Europe traded higher, with Hungary and Poland shares rising 0.4% and 0.5%, respectively.

In South Africa, the rand edged 0.1% higher against the dollar, while stocks in Johannesburg advanced 0.3% with focus on national and provincial elections scheduled for the end of May.

Global sentiment remained upbeat as data on Wednesday showed U.S. consumer prices increased less than expected in April, bolstering hopes that the Federal Reserve could kickstart its policy easing cycle as early as September.

"Overall, the latest print soothes some worries fuelled by a series of hotter inflationary readings earlier this year," economists at National Bank of Kuwait said in a note.

"This is likely to leave the Fed adopting a still-cautious approach to policy at next month's policy meeting."

Traders see an over 50% chance of the Fed cutting rates in September, as per the CME FedWatch Tool.

As of 0822 GMT, MSCI's index for emerging market equities rose 1%, touching its highest level since April 2022, while a gauge for currencies gained 0.4%, its highest since March 14.

Chinese shares closed higher on Thursday, with property shares rising following a report that China is considering a plan for local governments nationwide to buy millions of unsold homes.

Equity markets in the Gulf also joined the global cheer, with Saudi Arabia's benchmark stock index rising as much as 0.6%.

Elsewhere, the Philippine central bank signalled it could cut interest rates as early as August buoyed by fresh inflation and growth numbers, after it kept its key policy rate steady for a fifth straight meeting.


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(Reporting by Shashwat Chauhan in Bengaluru; Editing by Varun H K)