* Russia stocks tumble anew after new sanctions, on legal issues * China stocks gain after jump in industrial firm profits * Dollar index hovers near 6-mth highs as euro sags * This week's U.S. data eyed for directional cues By Marc Jones LONDON, July 28 (Reuters) - The euro was stuck near its lowest level since November and Russian markets tumbled for a third straight day on Monday as new European sanctions for Moscow chilled the already frosty relationship between the two. The 28-nation European Union reached an outline agreement on Friday on its first economic sanctions on Russia. Its increasingly tough stance was underscored by German finance minister Wolfgang Schaeuble, who said the "top priority" was peace rather than economic interests. Russia warned the moves would hamper cooperation between the two and undermine the fight against terrorism, although Foreign Minister Sergei Lavrov said on Monday that Moscow would not impose tit-for-tat measures. Europe's main bourses were flat in subdued trade as strong earnings updates and relief over Russia's response, and that the EU measures had steered away from Russia's gas industry, balanced concerns about the impact of the sanctions. There was more acute pain for Moscow stocks, however, with their woes compounded by an international court ruling that Russia must pay shareholders in defunct oil producer Yukos $50 billion for expropriating assets. That would be a big hit for a country teetering on the brink of recession. Moscow's dollar-denominated RTS index slumped 2.5 percent in response, its rouble-traded peer MICEX fell 1.8 percent and the rouble dropped over half a percent against both the dollar and the euro. "What we have today I think is largely because we have seen Germany stepping up rhetoric on tougher sanctions on Russia," said Vasileios Gkionakis, Global Head of FX Strategy for UniCredit in London. "Saying stability and peace is the top priority rather than economic interests are strong words. The rouble is definitely not a currency that I like." European shares' nerves over Ukraine and Russia were partially offset by a small number of positive company updates and after the latest rise in Chinese stocks had helped Asian markets hit a new three year-high. Nevertheless, the FTSEurofirst 300 index of top European shares struggled, trading flat at 1,371.40 points, after losing 0.7 percent on Friday. Wall Street was also expected to start little changed ahead of a flurry of PMI and manufacturing data. FED FOCUS At least three civilians were killed in overnight fighting in eastern Ukraine, after fierce skirmishes over the weekend had prevented international monitors reaching the crash site of the downed Malaysian Airlines plane that killed almost 300 people. As Russian debt slid, benchmark bonds of Germany and Austria , two of the countries with the closest economic ties to Russia - also saw minor selling though the ECB's pledge of record low interest rates limited the moves. Despite the geopolitical uncertainty, there was little shift among the major currencies as attention remained firmly on the global recovery and when big economies like the United States are likely to start raising interest rates again. The dollar was hovering at a six-month high against a basket of currencies while the combination of the tensions with Russia and the greenback's current strength kept the euro pinned near an eight-month low at $1.3435. Analysts and traders are ready for a busy week of U.S.-focused action including a Federal Reserve meeting and GDP data on Wednesday and non-farm payrolls figures on Friday. "We think the euro-dollar move may pause for breath at the start of this week before another shift lower at the end of the week," said Adam Myers, head of European currency strategy at Credit Agricole in London. "The market is clearly short on the euro but there doesn't quite seem to be the fuel over the next day or two to drive it much lower and that may squeeze some of those positions." In commodities, Brent crude slipped below $108 a barrel as fighting between Israel and Hamas Islamist militants subsided in Gaza, although the tense situations there as well as in Libya, eastern Ukraine and Iraq all limited the fall. Brent shed 86 cents to $107.46 a barrel after a 1 percent gain last week. Gold also slipped under pressure from the stronger dollar but was supported near $1,300 an ounce by its safe-haven appeal. (Additional reporting by Vladimir Soldatkin in Moscow and Patrick Graham in London; Editing by Catherine Evans)
Our Standards: The Thomson Reuters Trust Principles.
