* Lira steadies after hitting 1-month low
* China stocks gain on return from holidays
* South Korea’s Kospi boosted by Samsung shares
By Sruthi Shankar
Oct 8 (Reuters) - Emerging market stocks and currencies found support on Tuesday from a soft dollar and a positive resumption of trading on Chinese markets after a week-long holiday.
But optimism was tempered by concerns about the U.S.-China trade talks and the fallout of Turkey’s military action in Syria.
The Turkish lira barely made up its lost ground, edging up 0.3% following a 2.4% slump on Monday after U.S. President Donald Trump threatened to destroy its economy if Ankara took a planned military strike in Syria too far.
The contradictory message followed Trump’s decision on Sunday to pull 50 American special forces troops out of northeastern Syria, opening the door for a Turkish incursion.
“There is a little bit of risk appetite coming, and this has helped the lira to a small bounce back,” said Antje Praefcke, FX and EM analyst at Commerzbank in Frankfurt. “The lira is generally under pressure because of the Syria issue, which is a risk.”
Investors have been closely watching tense ties between Ankara and Washington in recent months, with the countries at odds over a range of issues, including Syria and Turkey’s purchase of a Russian missile defence system.
Turkey’s sovereign dollar bonds slid further, while its main BIST 100 stock index, down about 2%, hit a two-week low.
With few signs of progress in the U.S.-China trade dispute, investors were cautious ahead of a round of crucial talks between trade officials this week.
Indeed, the prospects of a deal dimmed after Washington on Monday blacklisted Chinese companies over Beijing’s treatment of predominantly Muslim ethnic minorities.
Chinese stocks , however, closed modestly higher as a dim services sector survey reinforced hopes that Beijing will roll out more stimulus measures.
Hong Kong-listed shares also a rose, despite concerns over violent protests, with shares in Hong Kong’s bourse HKEX up 2% after it scrapped its unsolicited $39 billion approach for London Stock Exchange Group.
South Korea was also a bright spot, with the Kospi jumping 1% after an upbeat forecast from the world’s biggest semiconductor firm Samsung Electronics.
In emerging Europe, the Hungarian forint edged lower after data showed consumer inflation slowed to an annual 2.8% in September, below an expected 3% rise, according to a Reuters poll.
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For RUSSIAN market report, see (Reporting by Sruthi Shankar in Bengaluru and Karin Strohecker in London; Editing by Alex Richardson)