EMERGING MARKETS-Mexico peso extends gains on trade talk hopes

SAO PAULO, July 10 (Reuters) - The Mexican peso extended gains on Monday as investors hoped that talks between Mexico and the United States over the North America Free Trade Agreement (NAFTA) could soon reach a favorable conclusion. After suffering for months on concerns that U.S. President Donald Trump could scrap NAFTA, the Mexican peso has since stabilized as he adopted a more constructive rhetoric. Trump hailed progress on trade after meeting Mexican President Enrique Pena Nieto on Friday on the sidelines of the G20 summit in Hamburg, Germany. The Mexican government has said it expects a general agreement on reworking the trade deal by the end of 2017. The peso firmed 0.7 percent, touching its strongest since late June. Also boosting the demand for the currency was a central bank decision to renew $200 million worth of foreign exchange hedging instruments. The Brazilian real also found support in central bank intervention, after the bank indicated it could fully roll over $6.2 billion worth of currency swaps maturing next month. Brazil's benchmark Bovespa stock index rose 0.8 percent, as shares of miner Vale SA tracked iron ore prices higher. Shares of Alpargatas SA, the maker of Havaianas flip-flops, fell 1.6 percent after Reuters reported controlling shareholder J&F Investimentos ended talks to sell a controlling stake in the company. Power utility Light SA jumped to the highest level in 16 years after shareholder Cia Energética de Minas Gerais SA decided to fully dispose of its stake as part of a divestment plan.

Key Latin American stock indexes and currencies at 1600 GMT:

Stock indexes daily % YTD % change change


MSCI Emerging Markets 1008.45 0.6 16.26 MSCI LatAm 2584.71 1.67 8.62 Brazil Bovespa 62807.70 0.78 4.28 Mexico S&P/BVM IPC 50508.00 0.9 10.66 Chile IPSA 4898.09 0.89 17.99 Chile IGPA 24482.71 0.81 18.08 Argentina MerVal 22093.52 0.3 30.59 Colombia IGBC 10920.79 -0.16 7.83 Venezuela IBC 123527.80 0.06 289.61 Currencies daily % YTD % change change


Brazil real 3.2625 0.50 -0.41 Mexico peso 17.9800 0.71 15.37 Chile peso 666.41 0.11 0.64 Colombia peso 3061.5 0.93 -1.96 Peru sol 3.255 -0.06 4.88 Argentina peso (interbank) 16.9950 -0.09 -6.59 Argentina peso (parallel) 17.17 0.17 -2.04

(Reporting by Bruno Federowski; Editing by Jonathan Oatis)