Russian assets tread water as oil rally falters

* MICEX and RTS give up opening gains as oil weakens

* Megafon IPO seen impacting Russian telecom stocks

* Rouble flat against dollar, gains against euro

By Jason Bush

MOSCOW, Oct 9 (Reuters) - Russian stocks were flat onTuesday morning, hampered by a faltering rally in oil prices andtelecoms stocks showing little reaction to a $2 billion IPOannouncement by mobile operator Megafon.

At 0810 GMT the rouble-denominated MICEX index


barely changed at 1473.4 points, while the dollar-denominatedRTS

had risen 0.1 percent to 1494.0.

Assets had tracked the oil price upwards at opening, withBrent rising towards $113 on the back of tensions in the MiddleEast, but the gains proved short-lived as oil fell back towards$112 during the morning.

Analysts said that Russia's markets are mainly being drivenby international developments, with attention focused on Tuesdayon German chancellor Angela Merkel's visit to Greece, and thestart of the U.S. earnings season.

Both are important drivers for global appetite for risk andoil prices.

There was confirmation of activity returning to Russia'scapital market on Tuesday, with an announcement by Megafon, itssecond largest mobile phone operator, of an IPO in Londonexpected to be worth around $2 billion.

Analysts at Alfa Bank wrote that they expected the placementto put downward pressure on fellow mobile operators,Moscow-listed MTS

and New York-listed Vimpelcom

, as investors sell shares in these companies in order tobuy Megafon stock.

However, shares in MTS were up 0.2 percent on Tuesdaymorning, while fellow Moscow-listed telco Rostelecom

was up 0.5 percent.

The rouble rose against the euro, which has weakened on theback of fresh concerns about Spain's debts, but was littlechanged against the dollar.

At 0810 GMT the rouble had gained one cent against thedollar to 31.15

, and 0.4 percent to 40.27 againstthe euro, leaving it 0.2 percent firmer at 35.25against the euro-dollar currency basket.

The yield on Russia's benchmark 2030 Eurobond

was also little changed at 2.91 on Tuesday morning, comparedwith 2.90 the previous day.Russian Latest Net % % ChangeMarkets Change Change on yearSTOCKSMICEX1473,39 -0,22 -0,01 5,07RTS1494,01 1,50 0,10 8,12London863,23 -0,32 -0,04 10,89ADRsEmrg Mkt998,36 0,43 0,04 8,94IndxMSCI799,25 -0,21 -0,03 8,48RussiaSberbank92,35 -0,25 -0,27 17,11VTB0,05 0,00 0,06 -7,04Gazprom158,92 0,02 0,01 -7,23LUKOIL1947,00 13,40 0,69 14,36Rostelecom134,52 0,72 0,54 -11,50Dollar/Rou31,15 -0,01 -0,03 -3,10leEuro/Roubl40,27 -0,15 -0,37 -3,52Rouble35,25 -0,07 -0,21 -3,32basketDEBT Bid Ask %Rtn CouponRussia7,66 7,65 0,11 7,6010-yr bondMONEY Bid Ask CloseMARKETOvernight5,85 6,35 5,44rateTABLE FROM POWER PLUS PRO

All data taken from Reuters at 0810 GMT

(Reporting by Jason Bush; editing by Patrick Graham)

((jason.bush@thomsonreuters.com)(Tel: +7 495 775 1242))