* Developing market tech stocks hit highest in 18 days
* Currencies weaken, Turkey’s lira eases for seventh straight day
* Emerging market borrowing costs rise to highest since Feb 2017
By Karin Strohecker
LONDON, May 8 (Reuters) - Strong gains in tech stocks adding to upbeat prospects and solid data for Chinese trade lifted emerging equities on Tuesday though currencies continued their slide as markets braced for U.S. President Donald Trump’s verdict on the Iran nuclear deal.
MSCI’s emerging markets benchmark index rose 0.4 percent to extend gains for a second day, with tech stocks jumping 1.4 percent, taking their cue from gains across major stock markets where upbeat earnings soothed concerns over weakness in global smartphone demand.
Stocks in Hong Kong and mainland China also chalked up healthy gains, helped by data showing that Chinese exports bounced back more than expected despite the trade brawl between Beijing and Washington. Domestic demand remained resilient.
Adding to the chipper mood was an announcement from the White House that China’s top economic official will visit Washington next week to resume trade talks with the Trump administration.
But there was little cheer for emerging market currencies, which had come out of a brutal week to suffer more falls against a stronger dollar
South Africa’s rand and Russia’s rouble weakened 0.5 percent against the dollar. But it was once again Turkey’s lira that looked the most vulnerable, weakening 0.8 percent in its seventh straight day of losses.
“We continue to see a pretty bad period,” said Cristian Maggio, head of emerging markets strategy at TD Securities, saying the dollar and higher U.S. yields were still taking their toll on emerging market currencies.
“For a few months this year we saw the dollar fall and that was a strong driver...Now that the tide has turned things look different, and I don’t know when that is going to change.”
Emerging market borrowing costs continued to rise, with average yield spreads of hard-currency bonds over safe-haven U.S. Treasuries widening to 332 basis points - their highest level in 15 months.
Markets were also cautiously awaiting a decision from Trump on whether Washington would withdraw from the Iran nuclear deal, a move that could disrupt global oil supply.
Trump has repeatedly threatened to withdraw from the deal, which eased economic sanctions on Iran in exchange for Tehran limiting its nuclear program, unless France, Germany and Britain - which also signed the deal, along with Russia and China - fix what he has called its flaws.
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For CENTRAL EUROPE market report, see
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For RUSSIAN market report, see) (Reporting by Karin Strohecker; Editing by Angus MacSwan)