The rouble fell on Monday amid a standoff between Russia and Ukraine but other emerging market currencies firmed against a softer dollar, with major crude importers such as Turkey and India benefiting from weaker oil prices.
Russia's main equity MOEX index shed 1.3 percent, hitting its lowest in over three weeks as market players priced in risks carried by Russia's seizure of Ukrainian naval ships off the coast of Russia-annexed Crimea.
The geo-political tensions also weighed on the rouble which weakened to its lowest since mid-November and Russian dollar-bonds fell across the curve.
"It is certainly a driver for the market to go down," said Regis Chatellier, EM senior credit strategist at Societe Generale in London. "In the case of Russia, with oil prices going down, this is not a very good combination."
However, a softer dollar drove gains in most emerging currencies, with those of major crude importers including Turkey's lira, India's rupee and Indonesia's rupiah firming as Brent failed to hold above $60 per barrel after Friday's 8 percent plunge.
The South African rand hit a three-month high after S&P Global Ratings kept its foreign and local currency ratings unchanged late on Friday, with a "stable" outlook.
Emerging stocks also gained strongly, with the MSCI index for emerging markets stocks on course to post its best day in almost two weeks on robust gains in Hong Kong, South Korea and Taiwan, which gained between 1.2 percent and 1.5 percent.
Mainland China shares however, closed marginally lower as investors weighed the confluence of risks in the upcoming US-China trade talks.
US President Donald Trump and Chinese President Xi Jingping will meet on the sidelines of the G20 summit in Argentina later in the week in what may be the best chance to broker a ceasefire as global growth increasingly suffers from frictions between the two biggest economies.
"With US stocks wobbling, and Chinese stocks and commodities and PMIs all stumbling, one can make a logical argument that both sides are too integrated and have too much to lose to allow trade tensions to escalate further," Michael Every, a senior strategist for Asia Pacific at Rabobank wrote in a note.
Washington is set to raise tariffs on $200 billion worth of Chinese imports in January if there is no agreement between the two countries.
In Eastern Europe, currencies and stocks opened slightly higher as European leaders signed off on British Prime Minister Theresa May's Brexit deal but investors remained cautious in case the British parliament rejects the deal.
The Czech crown continued to rebound from last week's 4-month lows against the euro.
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