HANOI (Reuters) - Foreign investors accelerated sales of Vietnamese stocks in recent weeks as trade risks grew for the export-reliant country, data shows, despite the prospect of a valuation-boosting market upgrade later this year.

The Southeast Asian export hub posted a record trade surplus with the United States last year and also imposes higher duties on imports, exposing it to the risk of U.S. tariffs as the Trump administration moves to reset trade imbalances, analysts have said.

Last month, foreign investors reduced their exposure to Vietnamese stocks by 6.4 trillion dong ($251.18 million), according to stock market data. Net selling from the $207-billion market was nearly three times more than in December.

The outflow was higher than in the much larger Indonesian market, but lower than in other bigger Asian markets, such as India or South Korea.

The trend in Vietnam accelerated in February, when foreigners' net selling amounted to 4.2 trillion dong in the first week of the month alone.

This week foreigners' sales have continued, hitting steelmakers after the Trump administration announced 25% duties on steel imports into the U.S. Vietnam is one of the country's main suppliers.

The protracted selling has so far not been offset by the prospect of Vietnam being reclassified by index manager FTSE Russell from frontier to emerging market, which officials and analysts consider likely to happen later this year.

FTSE added Vietnam in 2018 to its list of markets monitored for an upgrade, and the Communist-run country adopted key reforms in recent months, including in November removing full prefunding requirements on equity transactions for foreign investors, which was a key precondition for the FTSE upgrade.

FTSE is expected to issue an interim report in March on monitored markets and decide in September on Vietnam's possible upgrade, multiple officials have said.

The World Bank has estimated that an upgrade by FTSE and its bigger rival index manager MSCI would attract $5 billion in additional funding to Vietnam's stock market, noting in a report significant inflows were expected before the upgrade itself, as activist investors would bet on rising valuations.

That has so far not happened, as the key prefunding reform coincided with Trump's election win in November and a global outflow of foreign funds from emerging and frontier markets.

In November, foreigners' net selling of Vietnamese stocks reached 12 trillion dong, the highest outflow since June.

($1 = 25,270.00 dong)