SE Asia Stocks-Most rise on hopes China will push ahead with U.S. trade talks

* China to go ahead with talks despite Trump's threat

* Malaysia awaits policy rate decision

* Thai stocks fall after holiday

By Nikhil Subba

May 7 (Reuters) - Southeast Asian stocks recovered on

Tuesday on expectations China will still go ahead with trade

talks after U.S. prepared to impose tariffs on more Chinese

goods from Friday, while some economies in the region awaited

rate-cut decisions.

Asian shares remained fragile after U.S. President Donald

Trump's latest threat to raise tariffs on more Chinese goods

shocked financial markets and fuelled worries that trade talks

may be derailed.

However, fears of an escalation in trade war were somewhat

calmed by a statement from China's foreign ministry that a

delegation was still preparing to travel to the United States

for talks.

"The markets are probably relieved that China has not

reacted with threats of retaliatory tariffs, but has chosen to

send delegates to the U.S. to continue negotiations instead.

However, there is the possibility that talks will be extended

again as China holds its ground on certain issues," said Liu

Jinshu, director of research at NRA Capital.

The Philippine index gained about 0.7 percent, as a

possible rate cut became more evident after data showed the

nation's annual inflation in April had slowed.

"This inflation print paves the way for the BSP to cut the

Overnight Reverse Repurchase Rate (RRP) by 25 bps at its

monetary policy meeting on Thursday," ANZ Research said in a

note to clients.

Indonesian shares rose 0.68 percent with

telecommunications stocks leading gains.

Some analysts have argued Indonesia's central bank has room

to unwind rate hikes to support economic growth this year, after

data on Monday showed that the country's economy expanded more

slowly than expected in the first quarter, as investment

dropped.

Malaysian stocks rose 0.5 percent, their biggest

intraday percentage gain since April 24, with telecommunication

service providers Axiata Group and Digi.com

among best performers.

Malaysia's central bank is expected to cut its policy rate

by 25 basis points later in the day as the country faces subdued

inflation.

Singapore stocks, which are most exposed to the

U.S.-China trade conflict, rose 0.3 percent, after shedding more

than 3 percent on Monday.

Southeast Asia's largest lender DBS Group rose as

much as 1.3 percent while Conglomerate Keppel Corp

gained 1.5 percent.

Thai stocks traded 0.5 percent lower, led down by

energy and healthcare shares.

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SOUTHEAST ASIAN STOCK MARKETS AT 0359

Market Current Previous Pct Move

Close

Singapore 3296.8 3290.62 0.19

Bangkok 1672.02 1679.05 -0.42

Manila 7920.08 7862.3 0.73

Jakarta 6298.279 6256.352 0.67

Kuala Lumpur 1639.81 1632.8 0.43

Ho Chi Minh 958.84 957.97 0.09

Change on year

Market Current End 2017 Pct Move

Singapore 3296.8 3068.76 7.43

Bangkok 1672.02 1563.88 6.91

Manila 7920.08 8558.42 -7.46

Jakarta 6298.279 6194.498 1.68

Kuala Lumpur 1639.81 1690.58 -3.00

Ho Chi Minh 958.84 984.24 -2.58

(Reporting by Nikhil Subba; editing by Gopakumar Warrier)