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LONDON, Aug 4 (Reuters) - Emerging stocks recovered from one-month lows on Monday, lifted by a rally in Chinese stocks to their highest this year, while Russian stocks stabilised above three-month lows.
Chinese stocks rose around 2 percent to the year's highs, boosted by comments about the market from the country's top securities regulator.
Upbeat data on China's economy and the opening up of its markets to foreign investors have boosted its stocks this year.
That helped emerging stocks to test three-year highs last week before strong U.S. data and a hawkish U.S. Federal Reserve took some of the shine off higher-yielding assets.
"The MSCI emerging market (index) still trades close to the top of the trading range over the past two years," said Citi analysts in a client note.
"If the short end of the U.S. rates curve finally incorporates the risk of a more decisive shift of stance by the Fed - that can be the ultimate move to unlock a stronger momentum in the dollar."
The MSCI emerging equities index rose 0.54 percent, recovering from one-month lows set on Friday.
Growth in China's services sector slipped to a six-month low in July, however, according to data released late on Sunday.
Russian stocks were steady above three-month lows set last week and the rouble edged up against the dollar.
The European Union and United States ratcheted up their economic sanctions on Russia last week over Moscow's backing for pro-Russian rebels fighting in eastern Ukraine.
Brussels and Washington have left the door open to more sanctions if Russia does not help to cool the conflict in Ukraine. Moscow denies arming the rebels there.
Central European currencies were largely steady.
The Romanian leu was steady near recent one-week lows after the central bank cut rates by 25 basis points to a record low of 3.25 percent on Monday, helped by falling inflation.
Argentina's debt default last week has added to a more sombre mood about emerging markets, even though Argentina's economy is seen as isolated from many others.
The ISDA-facilitated Determinations Committee declared on Friday that a "failure to pay" event had happened in Argentina, triggering an auction process to settle outstanding credit default swap transactions.
Although the committee meets again on Monday, the auction process will likely take a few weeks, market participants said, and CDS prices are meanwhile effectively frozen.
But Argentina's 2033 dollar discount bond was steady at 84, according to Thomson Reuters data, still slightly above week-ago levels, suggesting hopes of a deal remained.
"When countries are in default, bonds do not normally trade at 85 cents on the dollar," said Mike Simpson, Latin America fund manager at Baring Asset Management.
"The market is expecting a resolution in the near term."
For GRAPHIC on emerging market FX performance 2014, see link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2014, see link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2014, see link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2014, see link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see ) (Editing by Ruth Pitchford)