LONDON, Jan 27 (Reuters) - Russia's rouble climbed on Tuesday, recovering some of its poise following a 6 percent drop the previous day after ratings agency Standard & Poor's cut the country's rating to junk, though Moscow stocks traded lower.
The rouble advanced 1 percent against the dollar but Moscow's dollar-denominated RTS index was 0.7 percent lower with investors fretting about possible new western sanctions.
Russia's stock market was closed when S&P announced on Monday it was cutting Russia's rating from BBB- to BB+, citing a weakened economic growth prospect.
"This (downgrade) is clearly a major headline risk that is going to affect rouble assets in the near term, even though current prices would suggest that a move was to a large extent priced in. Looking ahead, it will be interesting to watch what forced selling occurs on the sovereign debt," said Benoit Anne, head of emerging markets strategy at Societe Generale.
The cost of insuring exposure to Russian debt rose past the key 600 basis point mark, according to data provider Markit, while the premium investors demand for holding the country's bonds over U.S. Treasuries touched fresh 6-week highs. .
EU governments who meet on Thursday are also considering new sanctions on Russia, citing Moscow's "continued and growing support" for separatists in eastern Ukraine.
Elsewhere, Poland's zloty held its ground against the euro and the dollar after a flash estimate from the country's statistics office showed gross domestic product advanced 3.3 percent in 2014.
The Hungarian forint was trading 0.2 percent lower against the euro ahead of a central bank meeting where policy makers are widely expected to keep rates unchanged.
Turkey's lira gave up earlier gains against the dollar after Central Bank Governor Erdem Basci said the bank could call an early monetary policy meeting to take a quick decision on interest rates if inflation falls by more than 1 percentage point.
The broader MSCI emerging stocks index was flat, with sentiment held back by data from China showing the weakest factory profit growth in two years and economic growth slipping to a 24-year low.
Shanghai stocks fell 0.85 percent while Hong Kong dropped 0.4 percent.
Nigeria's naira continued to slide, falling 1 percent against the dollar pressured by a weak oil price and as the country's troops clashed with Boko Haram insurgents.
Shares in London-listed oil company Afren, which produces most of its oil in Nigeria, lost more than half their value as the company said it was in talks with bondholders over its funding needs as it struggles with weak energy prices.
For GRAPHIC on emerging market FX performance 2015, see link.reuters.com/jus35t
For GRAPHIC on MSCI emerging index performance 2015, see link.reuters.com/weh36s
For GRAPHIC on MSCI emerging Europe performance 2015, see link.reuters.com/jun28s
For GRAPHIC on MSCI frontier index performance 2015, see link.reuters.com/zyh97s
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see ) (Additional reporting by Karin Strohecker and Sujata Rao; Editing by Jon Boyle)