* Moody's downgrades Israel's credit rating to "A2"

* Markets shut in China, South Korea, Taiwan

* Pakistan stocks fall on elections uncertainty

* Stocks down 0.1%, FX flat

Feb 12 (Reuters) - A gauge of emerging market stocks was marginally lower in light trading on Monday, with Indian shares amongst leading fallers, while Israel's shekel dipped after ratings agency Moody's downgraded the country's credit rating.

MSCI's index for EM stocks edged 0.1% lower by 0918 GMT, on track for its third straight session decline, while currencies were largely flat on the day.

Israel's shekel fell 0.4% against the dollar after Moody's on Friday downgraded the country's credit rating, citing material political and fiscal risks from its war with the Palestinian militant group Hamas.

The rating was cut to "A2", which is five notches above investment grade, while its credit outlook was kept at negative, meaning a further downgrade is possible.

"Against the background of the security situation, a notch decrease in creditworthiness appears also rather unspectacular and would only follow market pricing rather than cause it," Michel Nies, an economist at Citi, wrote in a note.

"However, the negative outlook and the statement for the latter might be more concerning in the sense that an end to hostilities would not necessarily lead to a reversal of the downgrade."

Activity was mostly muted due to holidays in major hubs including mainland China, Singapore, South Korea, Taiwan and Malaysia.

In Europe, official data showed Turkey's unemployment rate fell 0.1 percentage point month-on-month to 8.8% in December, edging back towards the lowest level in a decade which it hit in October.

The lira was mostly stable against the dollar, while equities gained 0.9%, lifted by rising materials shares.

Hungary's forint eased 0.3% against the Euro after rising as much as 0.6% in the previous session, while South Africa's rand edged 0.1% higher, on track for its first daily advance in four sessions.

In the Gulf, Saudi Arabia's benchmark stock index gained 0.2% after Israel said it had "concluded" a series of strikes on southern Gaza.

The International Monetary Fund said on Sunday Middle East economies were lagging below growth projections due to oil production cuts and the Israel-Hamas conflict, even as the global economic outlook remained resilient.

Meanwhile, stocks in Pakistan fell as much as 2.8% after the country's national elections ended with no party winning a majority in parliament.

Equities in India were down 0.6%, dragged lower by declining energy shares.

HIGHLIGHTS ** China new bank loans in Jan hit record high on policy support ** Polish CPI may slow to 4% in Jan - central banker Wnorowski ** Hungarian president Novak resigns over sex abuse case pardon

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(Reporting by Shashwat Chauhan in Bengaluru Editing by Ros Russell)