MOSCOW (Reuters) - Russian shares reversed early losses on Wednesday and the rouble gained after Donald Trump won the U.S. presidency, raising hopes for a thawing in ties that could see the West’s sanctions regime on Moscow eased.

A vendor of cedar cones counts Russian rouble banknotes at a street market in Krasnoyarsk, Russia, October 17, 2016. REUTERS/Ilya Naymushin

At 1220 GMT, the dollar-denominated RTS index .IRTS was up 1.7 percent at 989 points, while the rouble-based MICEX .MCX gained 1.4 percent to 1,995 points. Both indexes had opened over 1 percent weaker.

Among Russian blue chips, sanctioned firms Sberbank SBER.MM and Rosneft ROSN.MM rose by 2.2 percent and 1.2 percent, respectively. Russian gold miner Polymetal POLY.MM jumped over 5 percent higher following a surge in the price of gold, seen as a safe haven during times of market volatility.

On global markets the dollar and stocks fell on the U.S. election result, which prompted some investors to dump riskier assets.

Trump, who unexpectedly defeated Democrat Hillary Clinton, was widely seen as being more favourably disposed towards Russia than Clinton after making warm comments about President Vladimir Putin.

“Trump has been too contradictory to be sure, but clearly the chances of sanctions being lifted on Russia have risen substantially, which would improve the investment climate for Russia,” said Charles Robertson, global chief economist for Renaissance Capital.

On Wednesday, Putin said Russia was ready to do its part to fully restore ties with Washington. Under the Obama administration Russia and the United States have clashed over the conflicts in Ukraine and Syria.

The rouble traded stronger as Wednesday progressed, but moves were more muted than in stocks.

At 1220 GMT the Russian currency was 0.4 percent firmer against the dollar at 63.53 RUBUTSTN=MCX on the Moscow Exchange and had risen 0.1 percent to trade at 70.20 versus the euro EURRUBTN=MCX.

Early on Wednesday on the interbank market the rouble briefly hit its weakest since Sept. 20 against the dollar as the reaction to an approaching Trump victory was initially one of risk aversion RUB=EBS.

Brent crude oil LCOc1, a global benchmark for Russia's main export, was down around 0.5 percent at around $45.8 a barrel after moving back and forth in choppy trade.

Currency traders said the rouble was performing better than emerging-market peers because Trump was seen as being less hawkish on Russia than Clinton.

Tom Levinson, chief FX and rates strategist at Sberbank CIB, said the rouble was relatively insulated versus other emerging markets as Russia did not have a large current account deficit and was not that exposed to the United States in terms of trade.

“Hopes of improved political dialogue between the U.S. and Russia are for now overpowering any concern about how Trump’s anti-trade stance will damage global growth and the oil outlook,” Levinson said.

“If Trump is successful in reassuring markets then it’s back to carry trades, and the rouble is the best,” he said. Investors have been investing in Russian assets because of the higher returns they can offer than ones on developed markets in so-called “carry trades”.

For rouble poll data see reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=RUB=

For Russian equities guide see <RU/EQUITY>

For Russian treasury bonds see <0#RUTSY=MM>

Russia in graphics: link.reuters.com/dun63s