London - Emerging equities inched off three-week lows on Wednesday after Chinese data soothed fears of an abrupt growth slowdown, with gains also filtering through to Russian markets despite simmering geopolitical tensions.

China's economy grew 7.4 percent in the first quarter from a year earlier, slightly above forecasts and bringing relief to markets which had been spooked by a recent string of soft numbers.

Gains were muted however, with Chinese shares ending just 0.1 percent higher and emerging stocks more or less flat on the day. Russian equities rose 0.25 percent, though they fell around 3 percent on Tuesday.

US President Barack Obama has warned Moscow it would face further costs for its actions in Ukraine. Fears of civil war are growing as pro-Russian separatists seize more buildings in eastern Ukraine, prompting Kiev to extend an “anti-terrorist” military crackdown.

“Despite the Chinese data or the situation in Ukraine, we are not really seeing any major movements, flows are quite low,” said Murat Toprak, a strategist at HSBC.

“We are watching news from Ukraine, everybody is waiting for tomorrow and whether the meeting between the US, Europe and Russia will go ahead ... whether things will calm down.”

He was referring to a scheduled four-way meeting between Ukraine, Russia, the European Union and the United States.

The tensions drove Ukrainian debt insurance costs in the credit default swaps (CDS) market to one-month highs of 1,145 basis points, a rise of 27 bps from the previous day, according to Markit data. Russian CDS traded near three-week highs.

However, Ukraine's hryvnia extended the previous session's gains to hit two-week highs against the dollar around 11.40 after the central bank resorted to an emergency 300 basis-point rate rise late on Monday to support the currency.

The hryvnia has now risen more than 10 percent this week.

The Russian rouble firmed 0.6 percent against the dollar , though it has lost almost 3 percent month-to-date.

Across the rest of emerging Europe, the Turkish lira firmed around half a percent, lifted by the generally positive mood. But it has been hurt by signs the central bank is under government pressure to undo some of the recent policy tightening.

In what many see as back door easing, the central bank has reduced average borrowing costs by providing more funding to banks through one-week repo auctions at a fixed 10 percent rate rather than at higher marginal lending rates.

Markets now await a central bank general assembly that could give the treasury more power over central bank appointments.

“This and other changes could soon force monetary easing even as inflation is accelerating towards 10 percent and the impact of such a development on Turkish risk premia will be wholly negative,” Commerzbank said in a note.

On bond markets, Romania raised 1.25 billion euros on Tuesday with a 3.7 percent yield and drawing over 5 billion euros in demand, showing firm appetite for new issues. Turkish bank Turkiye Finans also sold a sukuk that was three times subscribed, IFR reported.

Bond spreads on the EMBI Global sovereign bond index snapped in three basis points to 320 bps over U.S. Treasuries, away from the widest level since end-March.

The spreads had narrowed to May 2013 levels in recent weeks in line with a risk appetite bounce that had also boosted MSCI emerging equities 10 percent from their early-February troughs.

But Morgan Stanley analysts advised clients not to chase the emerging markets rally.

“We don't see top-down or bottom-up catalysts to extend the rally: We expect emerging markets to miss consensus estimates again, which would be the ninth quarterly miss in the last 11 quarters,” they said.

Markets were waiting to hear U.S. Federal Reserve Chair Janet Yellen speak at 1625 GMT.