The rouble strengthened in Moscow trade on Monday, heading back towards a near four-week high against the dollar, while Russian stocks extended their slide lower on the third session of trading after an almost month-long suspension.

The Russian market is gradually reopening and returning to normal after a suspension caused by sweeping Western sanctions that followed the beginning of what Russia calls "a special operation" in Ukraine on Feb. 24.

Russian stocks and bonds resumed trading in full on Monday, albeit for a curtailed time frame and with various restrictions, including a ban on short selling, still in place. Non-residents are barred from selling stocks and OFZ rouble bonds until April 1.

By 0956 GMT, the rouble was 2.2% stronger against the dollar at 93.89, clipping 92.51 earlier in the session, a mark close to its strongest since March 1.

"In the conditions of continuing capital controls and the absence of serious sanctions tightening, the exchange rate could slowly continue strengthening towards 90," said Dmitry Polevoy, head of investment at Locko-Invest.

The rouble had gained 1.8% to trade at 102.92 versus the euro, having briefly touched 97.50, a one-month high.

Offshore, the rouble was trading at around 98 to the greenback.

Investors are keeping an eye on the outcome of peace talks between Russia and Ukraine that may get underway in Turkey on Tuesday.

STOCKS STRUGGLE

Equities largely lost ground, with flag carrier Aeroflot a notable exception, recovering to gain 5% after touching its lowest since 2009 in early trade.

The rouble-based MOEX Russian index was 1.9% lower at 2,436.0 points. The dollar-denominated RTS index was down 0.9% to 822.4 points.

Depositary receipts cannot be traded yet. Finam brokerage said in a note that the stock market's slide was continuing in the absence of any growth drivers.

Dominant lender Sberbank shed 3.9%, gas giant Gazprom fell 3.6% and oil major Rosneft slid 1.9%.

Yields on Russia's benchmark 10-year OFZ treasury bonds were at 13.63%, down from last week's record high of 19.74%, which is just below the central bank's key interest rate, but still at levels last seen in March 2015.

Yields move inversely to prices.

Russia has demonstrated that it can continue to service foreign currency debt in recent weeks, but that ability will be tested once more on Monday, with Russia scheduled to pay a $102 million coupon on a Eurobond due in 2035.

(Reporting by Reuters, editing by Ed Osmond)