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MOSCOW, April 29 (Reuters) - Russian shares rebounded further on Tuesday morning, reflecting investors' relief that new western sanctions against Russia over Ukraine were less steep than many had feared.
At 0730 GMT the rouble-denominated MICEX index was up 1.2 percent to 1,315 points, while the dollar-denominated RTS had risen 1.8 percent to 1,160 points.
On Monday, when the new sanctions were announced, the MICEX rose 1.6 percent and the RTS 2.2 percent, having fallen 5.6 percent and 6.7 percent respectively the previous week.
"The new sanctions have caused a sigh of relief," Golden Hills Capital analyst Natalia Samoilova said in a morning note.
"The market had priced in far more serious sanctions against whole sectors of the economy."
The United States spared major listed companies or whole sectors, instead targeting individuals close to President Vladimir Putin and companies belonging to them, none of which are traded on the stock exchange.
Analysts said markets were also reacting positively to a statement by Russia's defence minister that Russian troops were being withdrawn from the Ukrainian border, and that Russia was open to contacts to resolve the tension.
"The fall in the market last week was extremely serious: investors were preparing for the worst-case development of events, therefore they are now attempting to return to purchases," Investcafe analyst Mikhail Kuzmin said in a note.
"All the same, the question remains current, how will the situation with rebels in eastern Ukraine be resolved? If the Ukrainian authorities return to active military operations and there are new victims, this could again destabilise the conflict situation."
Russia has said that it has the right to intervene militarily in Ukraine to protect Russian speakers, while the West has warned of much tougher sanctions if Russia invades.
The rouble was also stronger on Tuesday, rising by 0.3 percent to 35.71 against the dollar and by 0.2 percent to 49.55 against the euro, stengthening by 0.2 percent to 42.96 against the dollar-euro basket. (Reporting by Jason Bush; Editing by Sophie Walker)