Rouble edges up after hitting near 2-week low, Russian stocks recover

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MOSCOW, Jan 19 (Reuters) - The rouble edged higher after sliding to a near two-week low past 77 versus the dollar on Wednesday, while Russian stocks made a slight recovery after several sessions of sharp losses, with Russian assets still blighted by geopolitical concerns.

By 0924 GMT, the rouble was 0.4% stronger against the dollar at 76.64 . Earlier, it slipped to 77.17, the weakest mark since Jan. 6.

The currency gained 0.2% to trade at 86.91 versus the euro .

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Russia's currency has been haunted by a stand-off between Moscow and the West. Russia says it is concerned about NATO's expansion, while the West says a Russian troop buildup at Ukraine's border could be preparation for an invasion. Moscow denies it is planning to invade.

"In EM, to say that Russian assets and the currency have fallen out of favour would be an understatement, but price action could get a lot worse if the next diplomatic effort on Friday between Moscow and Washington comes to nothing," Societe Generale said in a note.

Russian Foreign Minister Sergei Lavrov and U.S. Secretary of State Antony Blinken are due to hold talks in Geneva on Friday to discuss security guarantees Moscow is seeking from the West.

Russia's 10-year OFZ yields eased to 9.29% on Wednesday from their highest since early 2016 of 9.52% hit this week . Yields move inversely to prices.

Stock market volatility will remain in the short and possibly medium term, said Aton investment management firm, with geopolitical tensions continuing to weigh.

"Foreign investors are standing by and waiting for clarification about potential sanctions: no one wants to come to the market and then one morning see minus 15-20%," Aton said.

Brent crude oil , a global benchmark for Russia's main export, hit a more than seven-year high of $89.05, helping Russian stock indexes recover some ground.

The rouble-based MOEX Russian index (.IMOEX) was 3.4% higher at 3,442.1 points, recovering some of the ground lost on Tuesday. It had slid to its weakest point since late December 2020 of 3,256.60 points in early trade on Wednesday.

The dollar-denominated RTS index (.IRTS) was up 3.5% to 1,415.2 points, also recovering from a December 2020 low.

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Reporting by Alexander Marrow; additional reporting by Katya Golubkova and Karin Strohecker; Editing by Sherry Jacob-Phillips and Subhranshu Sahu

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