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UPDATE 1-Russian shares edge lower, rouble up on oil, debt auction

* Russian stocks fall as risk appetite wanes

* Norilsk Nickel underperforms after court ruling

* Rouble gains against dollar on higher oil

(Updates prices, adds details and trader comment)

By Maya Dyakina

MOSCOW, Oct 10 (Reuters) - Russian shares fell on Wednesday, underperforming emerging market peers, while the rouble was stronger, supported by higher oil prices and an auction for rouble-denominated treasury bonds.

The rouble-denominated MICEX index

was down 0.9 percent at 1,459.67 in light trade at 1347 GMT, while the dollar-denominated RTS index

was

off 0.8 percent at 1,482.54. Emerging market equities

were down 0.3 percent as persistent worries about the euro zone debt crisis and about global corporate earnings weighed on risk appetite.

"There are almost no new money inflows," said Vadim Feldblyum, a senior client manager at BCS.

Citibank has increased the weight of Russia's oil stocks in its portfolio, citing the new tax reform and a dividend yield of 5 percent. Russia aims to reduce the levy on future undeveloped field projects, Energy Minister Alexander Novak said on Tuesday

. Shares of Russia's No.2 crude producer LUKOIL fell 0.3 percent.

Fast-growing Russian retailer Magnit

saw minor gains in its share price after the company reported a 36 percent rise in September sales, but gave up those gains to end the day in the red.

Shares of Norilsk Nickel

, the world's largest nickel and palladium miner, was one of the major fallers, down 1.9 percent, after Russian aluminium group RUSAL

won a Siberian court ruling against the company.

"It may be perceived that political support for Rusal has strengthened in connection with the appointment of Mathias Warnig as Rusal's chairman," analysts at Alfa-bank wrote in a note, suggesting the news was negative for Norilsk.

The rouble was helped by the higher oil price, rising by 0.2 percent to 31,10 against the dollar

, but was up 0.13 percent against the euro and rose 0.2 percent against the euro-dollar currency basket .

Oil prices - a key source of revenues for Russia and a major driver of the rouble - dipped slightly on Wednesday but were still above $114 a barrel after rising more than 2 percent on Tuesday on escalating tension on the border of Turkey and Syria.

"The rouble could strengthen even more, exporters are selling, oil prices are supportive, OFZ auction was a success, however, client purchases (of foreign currency) do not let it rise," said Pavel Demeschik, a dealer at ING bank.

Russia placed almost all of the 35 billion roubles on offer of treasury bonds at auction on Wednesday, with strong foreign interest and one bid coming from a large state bank covering nearly 50 percent of demand.

Russian Markets Latest Net % Change % Change Change on year STOCKS MICEX 1459,67 -13,27 -0,90 4,10 RTS 1482,54 -11,62 -0,78 7,29 London ADRs 854,30 -7,34 -0,85 9,74 Emrg Mkt Indx 993,62 -2,97 -0,30 8,43 MSCI Russia 792,36 -5,71 -0,72 7,55 Sberbank 92,01 -0,62 -0,67 16,68 VTB 0,05 -0,00 -0,87 -8,42 Gazprom 155,25 -1,90 -1,21 -9,37 LUKOIL 1943,90 -3,80 -0,20 14,18

Rostelecom

135,10 -1,52 -1,11 -11,12

Dollar/Rouble

31,10 -0,07 -0,21 -3,26

Euro/Rouble

40,11 -0,05 -0,13 -3,89

Rouble basket

35,16 -0,06 -0,17 -3,58

DEBT Bid Ask %Rtn Coupon Russia 10-yr

7,63 7,60 0,16 7,60

bond MONEY MARKET Bid Ask Close Overnight rate 6,19 6,69 5,89 TABLE FROM POWER PLUS PRO All data taken from Reuters at 1420 GMT ($1 = 31.1605 Russian roubles)

(Reporting by Maya Dyakina; Editing by Elaine Hardcastle)

((maya.dyakina@thomsonreuters.com)(+7-495-775-12-42))

Keywords: RUSSIA MARKETS/