Russian stocks and rouble edge higher after sanctions-driven sell-off

MOSCOW, April 12 (Reuters) - Russian stocks indexes and the rouble recovered slightly at the market opening on Thursday after suffering steep declines caused by new U.S. sanctions.

Volatility on the Russian market has soared since Washington imposed more sanctions against Moscow last Friday, targeting some of Russia's biggest companies and most prominent businessmen.

The rouble started trading in Moscow on a weaker note on Thursday but soon reversed losses. The Russian currency was up 0.8 percent against the U.S. dollar at 62.08 by 0715 GMT , having hit its weakest since 2016 at 65.06 the previous day.

Versus the euro, the rouble gained 1 percent to 76.65 after briefly touching 80.50 on Wednesday, a level last seen in March 2016.

The market is watching for clues on further escalation of tensions between the United States and Russia over the conflict in Syria.

On Wedneday U.S. President Donald Trump warned Russia of imminent military action in Syria over a suspected gas attack, declaring that missiles "will be coming" and lambasting Moscow for standing by Syrian President Bashar al-Assad.

For now, the key source of uncertainty is whether the United States carries out a missile strike on Syria and what response would come from Russia, Rosbank analysts said.

On the domestic front, there has been only a muted reaction so far from Russian financial authorities after the sell-off that dented the currency, stock markets and bonds, posing risks for an already sluggish economic recovery.

In a sign that the rouble's drop was causing concern for authorities, the finance ministry this week put purchases of foreign currency for its reserves on hold to avoid extra pressure on the falling currency.

Higher oil prices generally played on the upside for Russian assets.

As Brent crude futures inched 0.2 percent higher to $72.20 , the dollar-denominated RTS index was up 2.9 percent at 1,114.7 points, bouncing after hitting its lowest level since August earlier this week.

The rouble-based MOEX Russian index was 0.2 percent down at 2,188.5, pressured by the recovering rouble.

Shares in Rusal, the world's second-biggest aluminium producer, were up more than 3 percent on the Moscow Exchange . They have lost 37 percent of their value since the company was put on the U.S. sanctions list on Friday.

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(Reporting by Andrey Ostroukh Editing by David Goodman)