* Ukraine set to send $20 bln rework proposal to bondholders by May - sources

* Hang Seng jumps on policy support, China shares close lower

* China leaves benchmark lending LPRs unchanged, as expected

* EM stocks up 0.6%, FX flat

April 22 (Reuters) - Emerging market stocks started the week higher on Monday as fears of a wider middle east conflict receded, while currencies were little changed.

The MSCI index for emerging market stocks gained 0.6% by 0833 GMT, after falling 3.6% last week, its worst week since June last year as Middle East tensions heightened from Israel's strike on Iran.

The risk-sensitive markets have calmed since then after Tehran played down the incident and indicated it had no plans for retaliation.

The Hang Seng index rose 1.8% after China's regulator on Friday said it will facilitate Hong Kong listings by leading Chinese companies and expand the Stock Connect cross-border investment scheme to promote Hong Kong's status as a global financial centre.

However, China's blue-chip CSI 300 index and Shanghai Composite index closed 0.3% and 0.7% lower, while the yuan softened to a five-month low against the dollar.

Beijing also left benchmark lending rates unchanged at a monthly fixing, in line with market expectations.

Around the region, MSCI's Asia ex-Japan stock index gained 0.8%, with South Korean shares advancing 1.5% as the country's finance minister expressed a strong will to continue to push for corporate reforms.

In central Europe, the Polish zloty slipped 0.3% against the euro after industrial output fell more than expected in March, while producer prices, employment and wage prints were broadly in line with expectations.

Hungary's forint inched higher ahead of Tuesday's rate decision.

"Although (Hungary's) inflation data has continued to come in weak, with headline CPI falling to +3.6% year-over-year in March, the Forint remains the 'binding constraint' on the pace of rate reduction," Goldman Sachs economists said in a note, adding that they expect the central bank to cut by 50 basis points.

Central bank decisions from Indonesia, Turkey, Ukraine and Russia are also on tap later this week.

Ukraine is also poised to send international bondholders a proposed plan to restructure its $20 billion in debt by early May, two sources familiar with the situation told Reuters.

The war-torn country has struggled to shore up its finances, though momentum has picked up after the U.S. House of Representatives on Saturday passed a legislative package that will provide Ukraine with security assistance of $60.84 billion.

The $95 billion legislative package will also provide $26 billion for Israel and $8.12 billion for the Indo-Pacific.

The emerging markets currencies index was nearly flat, after posting its second straight weekly loss on Friday.

Elsewhere, Angola hopes to return to international bond markets this year with a $1 billion bond, Finance Minister Vera Daves de Sousa told Reuters.

South Africa faces upside risks to its inflation outlook, Central Bank Governor Lesetja Kganyago said.

The rand ticked lower against the dollar and was down nearly 4.3% so far this year.


** Ghana finance minister expects MoU with bilateral lenders in May

** Vietnam cenbank delays gold auction on lack of interest

** Vietnam set to launch new stocks trading system

(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Varun H K)