UPDATE 1-Russian stocks and rouble edge higher after sanctions-driven sell-off

sell-off@ (Adds quotes, detail, updates prices)

MOSCOW, April 12 (Reuters) - Russian stocks and the rouble recovered on Thursday after suffering steep declines on concerns over 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.

Reuters calculations show that three Russian tycoons may have lost a combined $7.5 billion since the list of U.S. sanctions was announced.

After hitting its lowest since 2016, the free-floating rouble started winning back lost positions.

The Russian currency was up 1.4 percent against the U.S. dollar at 61.71 by 1454 GMT, having hit its weakest since 2016 at 65.06 the previous day.

Versus the euro, the rouble gained 2.1 percent to 75.87 after briefly touching 80.50 on Wednesday, a level last seen in March 2016.

The Russian currency was still a long way from the levels of around 57.50 to the dollar and 71 against the euro before the latest sanctions.

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

On Wednesday 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, against the backdrop of an already sluggish economic recovery, 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.

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.

The rouble's weakening is likely to spur inflation, which can limit room for the central bank to cut rates this year.

Morgan Stanley said it now expects the central bank to hold the key rate at 7.25 percent this month. Before the sanctions the market had widely expected the central bank to cut rates as soon as April 27.

"That said, we think we are far from a rate hike, unless the rouble weakens to 70 (against the dollar) or there are signs of panic and switching behaviour by households or inflation expectations deteriorate dramatically," Morgan Stanley said.

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

As Brent crude futures rallied above $71 a barrel this week, the dollar-denominated RTS index jumped 3.6 percent higher to 1,122.7, bouncing after this week's drop to its lowest level since August.

The rouble-based MOEX Russian index was 0.3 percent higher at 2,199.2, with its gains coming under pressure from the recovering rouble.

Shares in Rusal, the world's second-biggest aluminium producer, were up nearly 4 percent. They have lost 36 percent of their value since the company was put on the U.S. sanctions list on Friday.

For Russian equities guide see

For Russian treasury bonds see (Reporting by Andrey Ostroukh Additional reporting by Elena Fabrichnaya Editing by David Goodman)