LONDON Feb 27 (Reuters) - The Russian rouble sank to five-year lows versus the dollar on Thursday and held near record lows against the euro, hit by concern over Russia's defiant response to the political turmoil in neighbouring Ukraine.
Ukraine's hryvnia hit an all-time low against the dollar, while some sovereign bonds slipped as armed men in the Crimea peninsula seized the regional government headquarters and parliament and raised Russian flags.
The prospect of armed conflict spooked investors after Russia said it would defend the rights of its compatriots in a "strong and uncompromising" manner, while the defence ministry was quoted as saying fighter jets along Russia's western borders had been put on combat alert.
"There are definitely fears about geo-politics, and the general mood towards emerging markets is not great. The concern is this could develop into a proper civil war in Ukraine that splits the country," said Manik Narain, strategist at UBS.
"People are drawing parallels with the 2008 Russia-Georgia war."
The rouble fell as low as 36.11 per dollar and held near record lows against the euro and its dollar-euro basket. The hryvnia fell to a new low of 10.66 per dollar, bringing its losses this year to around 20 percent.
The Turkish lira fell again, extending losses made after voice recordings purportedly of Prime Minister Tayyip Erdogan in graft allegations emerged late on Tuesday, fanning political uncertainty weeks ahead of local elections.
The lira was down 0.7 percent at 2.24 per dollar.
The broader emerging equity index rose 0.4 percent , thanks to a rebound in Chinese shares.
Romania's leu firmed slightly to 4.5090 per euro although investors were nervous about the political situation there after the ruling coalition broke up late on Tuesday.
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