* Trump scheduled to discuss U.S. trade policy later on Tuesday
* MSCI EM index up 0.5%
* EU imposes sanctions on Turkey
* Lira flat ahead of Trump-Erdogan meeting
By Susan Mathew
Nov 12 (Reuters) - Emerging market shares recovered on Tuesday, while currencies were largely unchanged, with investors keenly waiting for a speech by U.S. President Donald Trump later in the day for signs of progress on a U.S.-China trade deal.
MSCI's index of emerging market shares ticked 0.5% higher after logging their steepest one-day drop in three months on Monday following an escalation of violence in Hong Kong.
Asian stocks gained half a percent, with those in Hong Kong, South Korea and Taiwan recovering strongly from declines in the previous session.
Shares in Turkey rose 0.6% and were on track for their best session in three, while South Africa and Russia gained 0.1% and 0.4%, respectively.
Later on Tuesday, Trump is scheduled to discuss U.S. trade policy at the Economic Club of New York, and markets will be looking for any positive comments about the economically-damaging trade war with Beijing.
"We're somewhat sceptical of some of these developments; the 'phase one' deal is more like a truce in the trade war," said William Jackson, chief emerging market economist at Capital Economics.
"It doesn't tackle the structural issues that lie at the heart of the trade war and that would still keep the trade hawks in Washington in favour of keeping tariffs high."
China's yuan firmed 0.1% against the dollar, which held steady at near one-month highs. Data on Tuesday showed Chinese bank lending growth undershot analysts' estimates, but the drop was likely due to seasonal factors.
The South African rand rose 0.2%, while Turkey's lira traded flat after European Union foreign ministers imposed sanctions on Turkey to punish Ankara for violating Cyprus' maritime economic zone by drilling off the divided island.
All eyes are also on President Tayyip Erdogan's Washington visit this week. The Turkish leader has said he would tell Trump that the United States had not fulfilled an agreement to remove the Syrian Kurdish YPG militia from a region along Turkey's border.
Currencies in emerging central and eastern European economies including Hungary, Poland and the Czech Republic were largely flat against a slightly weaker euro.
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For RUSSIAN market report, see (Reporting by Susan Mathew in Bengaluru; Editing by Kirsten Donovan)