* Iran attack on U.S. forces triggers flight to safety
* EM stock index on track to break 5-week winning streak
* Russian stocks hit record high on rising oil prices
Jan 8 (Reuters) - Stocks in the developing world fell on Wednesday, as investors remained wary of riskier assets after Iran launched missiles at bases housing U.S. forces in Iraq, while the South African rand reversed an initial drop to firm slightly.
Iran retaliated against the U.S. drone strike that killed an Iranian commander late last week, an attack that stoked fears of an all-out conflict in the Middle East and set off a bout of risk aversion.
However, Iranian officials said Tehran did not want a war and its strikes "concluded" its response to the U.S. air strike, helping settle down surges in oil and gold prices.
"There is a deterioration in risk appetite following Iran's attack on the U.S. base. That said, the general consensus at the moment seems that this attack was calibrated to possibly limit the rise in tensions," said William Jackson, chief emerging markets economist at Capital Economics in London.
"Comments from the Iranian officials seems like they were acting but without making things worse, which is also limiting the size of the fall we are seeing today."
MSCI's index for emerging market stocks fell 0.5%, putting it on track to log its first weekly decline in six weeks.
The Russian stock index, considered sensitive to fluctuations in crude prices, climbed to a fresh record high and was the only major stock index in the black.
MSCI's index for emerging market currencies on the other hand, was flat. South Africa's rand firmed against the dollar after a weaker start to the day.
Prices of gold, one of South Africa's main exports, surged more than 2% earlier in the day, helping support a rise in the country's currency.
South Africa's net foreign reserves rose to $44.897 billion in December from $44.415 billion in November, Reserve Bank data showed.
The Turkish lira weakened slightly and hovered around its weakest levels in seven months.
For GRAPHIC on emerging market FX performance 2020, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance 2020, see https://tmsnrt.rs/2OusNdX
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For RUSSIAN market report, see (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Giles Elgood)