UPDATE 1-Russia stocks, rouble up as Middle East tension flares


* Russian stocks follow oil price upwards amid Syriatensions

* Retailers Magnit and X5 publish contrasting sales results

* Rouble up against dollar and euro

(Updates prices, adds details and comments)

By Jason Bush and Zlata Garasyuta

MOSCOW, Oct 11 (Reuters) - Russian stocks edged up onThursday, shrugging off morning losses as escalating tensionover Syria pushed up oil prices, which also helped lift therouble and Russian bond prices.

At 1335 GMT the rouble-denominated MICEX index

was up0.3 percent to 1465.3 points, while the dollar-denominated RTS

was up 0.6 percent to 1493.2 points.

Russia's markets were lifted by a rising oil price, on a daywhen Turkey intercepted a Russian plane bound for Syria,provoking a diplomatic row between Moscow and Ankara.

The incident highlighted concern that the Syrian conflictmay spread and cause wider instability in the Middle East, theworld's largest oil-producing region, coming a few days afterTurkey retaliated against cross-border shelling from Syria.


gained almost $1 during the day, pushing above$115 per barrel, and has gained over $7 in the past week.

The firming oil price enabled Russia's markets to shrug offa lacklustre start to the day, when Russia fell in line withother emerging markets after Standard & Poor's cut Spain'ssovereign rating by two notches on Wednesday.

Despite the afternoon rally, Russia's market is presentlyhamstrung by scarce liquidity, with many investors husbandingcash in advance of an expected $2 billion IPO by Russiantelecommunications company Megafon, said a trader at a largewestern bank.

"Everything revolves around the lack of liquidity on themarket ahead of the Megafon IPO. There's a feeling thatinvestors are holding back money - to preserve ammunition, so tospeak," he said.

Fast-expanding Russian retailer Magnit

outperformed the market, rising 1.2 percent, a day afterpublishing bullish nine-month sales results.

Dmitry Ryzhkov, head of foreign sales at Alfa Bank, saidthat investors are transferring into Magnit's locally listedshares in preference to its internationally traded depositaryreceipts, which trade at a sizeable 25 percent premium.

"No one wants to be underinvested in Magnit," he said.

But larger London-listed Russian retailer X5


down 0.3 percent on Thursday, after disappointing with a 10.4percent annual rise in third-quarter sales.

The oil price rise also helped the rouble. At 1335 GMT therouble was up 0.3 percent at 31.00 to the dollar


up 0.1 percent at 40.10 to the euro

and up 0.2percent to 35.09 against the basket.

The yield on Russia's benchmark 2030 Eurobond

was marginally tighter at 2.82 percent, compared with 2.86percent on Wednesday.Russian Latest Net % % ChangeMarkets Change Change on yearSTOCKSMICEX1465.28 4.35 0.30 4.50RTS1493.15 9.31 0.63 8.05London859.38 3.99 0.47 10.39ADRsEmrg Mkt995.70 3.61 0.36 8.65IndxMSCI796.85 3.81 0.48 8.16RussiaSberbank92.77 0.48 0.52 17.64VTB0.05 0.00 1.19 -7.00Gazprom154.92 -0.38 -0.24 -9.56LUKOIL1943.70 6.70 0.35 14.17Rostelecom135.00 -0.50 -0.37 -11.18Dollar/Rou31.00 -0.10 -0.33 -3.59leEuro/Roubl40.10 -0.02 -0.06 -3.91Rouble35.09 -0.07 -0.19 -3.75basketDEBT Bid Ask %Rtn CouponRussia7.58 7.50 0.28 7.6010-yr bondMONEY Bid Ask CloseMARKETOvernight6.29 6.79 6.19rateTABLE FROM POWER PLUS PROAll data taken from Reuters at 1335 GMT

(Reporting by Jason Bush and Zlata Garasyuta; Editing by HughLawson)

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