London - Russian shares posted their biggest jump in a month on Wednesday as investors were relieved that new sanctions announced by Brussels and Washington on Tuesday were as expected and not tougher.

Argentina's debt insurance costs fell from recent elevated levels and the country's dollar discount bond rose as investors took some cheer over talks between the country's officials and holdout debt investors that could avert default.

New EU sanctions on Russia, the full text of which will be made publicly available on Thursday, are expected to restrict Russian state-owned banks' access to medium and long-term financing.

The United States added three state-owned banks to its sanctions list - VTB, Russian Agricultural Bank and Bank of Moscow.

“Sanctions had been signalled so much in advance that they were mostly expected,” said Richard Segal, an analyst at Jefferies, adding that sanctions were not as harsh as some had feared.

“There had still been concern that non-financial companies might be targeted.”

The rouble-denominated MICEX index rose 2.3 percent by 12:55 SA time, while the rouble itself was up 0.5 percent.

Russia's five-year credit default swaps retraced some recent gains, falling four basis points from Tuesday's close to 227, according to Markit.

Central European currencies, which have been hit by worries about a regional impact from the sanctions, were little changed.

The broader MSCI emerging stocks index rose 0.2 percent to its highest since early 2012, testing three-year highs, as investors awaited US GDP data and non-farm jobs figures that come out later in the week, while a two-day Federal Reserve meeting ends on Wednesday.

Analysts expect US interest rates to remain unchanged, driving demand for higher-yielding emerging-market assets.

Argentina's five-year credit default swaps dropped 30 basis points from Tuesday's close to 1,869 bps, according to Markit.

The CDS had hit six-week highs on Tuesday.

Argentina's dollar discount bond due 2033, on which coupon payments are due on Wednesday, rose to around 87 cents on the dollar.

If a deal with holdout debt investors is not reached on Wednesday, Argentina faces default on its sovereign debt.

But talks between Argentina and holdout bond investors have kept hopes of a deal alive.

Economy Minister Axel Kicillof left a meeting at the court-appointed mediator's office in Manhattan late on Tuesday saying both sides would meet again on Wednesday, though the mediator said in a statement that details of such a meeting had not yet been determined.

The South African rand fell to its lowest level in a week against the dollar ahead of key trade data later this week.

Turkish markets were shut for a holiday. - Reuters