(Adds final prices, Mexico, Chile) SAO PAULO, Nov 27 (Reuters) - Brazilian stocks fell on Monday as traders feared the government might have to weaken pension legislation further to ensure its approval in Congress. President Michel Temer's administration agreed last week to soften its controversial plan to streamline the social security system after facing strong opposition from lawmakers. That proposal would generate fiscal savings of about 60 percent of the government's original proposal, down from 75 percent under a previous version. Investors widely see the bill as necessary to curtail rising public debt and to allow the government to meet fiscal targets. Temer's allies in Congress have acknowledged that the plan might be watered down again to guarantee its approval in the lower house this year. In a report, analysts at Magliano Corretora brokerage said they expected stock market volatility to spike until the pension reform plan goes to a vote in early December. The benchmark Bovespa index fell 0.13 percent on Monday, dragged down by blue-chips such as miner Vale SA and lenders Banco Bradesco SA and Banco do Brasil SA. State-controlled oil company Petróleo Brasileiro SA tracked crude prices lower. Shares of phone carrier Oi SA, which are not part of the benchmark index, fell after news of Chief Executive Officer Marco Schroeder's resignation. In a client note, Credit Suisse said the move should make it harder to find a restructuring plan to please all shareholders, heightening the chances of a government intervention as Oi struggles to emerge from bankruptcy protection. The Brazilian real firmed 0.4 percent while Mexico's peso seesawed. Traders moved on growing doubts about the U.S. government's ability to implement a tax overhaul which buffeted the greenback globally. Investors had earlier cheered news that Mexico's finance minister Jose Antonio Meade would seek the presidency after resigning on Monday. Officials say his reputation for honesty and cross-party appeal will be vital if he hopes to defeat former Mexico City Mayor Andres Manuel Lopez Obrador in the July 2018 presidential vote. Left-leaning Lopez Obrador, who has captained a populist platform that investors fear could stir tensions with the U.S. government, has been leading polls for the election, which could be the most competitive in decades. Dragged down by falling copper prices, Chile's peso fell 0.64 percent to its lowest level against the dollar in almost a month.
Key Latin American stock indexes and currencies at 2240 GMT:
Stock indexes daily % YTD %
change change Latest
MSCI Emerging Markets 1144.33 -0.86 32.71 MSCI LatAm 2807.28 -0.38 19.94 Brazil Bovespa 74058.92 -0.13 22.97 Chile IPSA 5032.53 -0.16 21.23 Chile IGPA 25337.51 -0.12 22.20 Venezuela IBC 798.87 12.19 -97.48 Currencies daily % YTD %
change change Latest
Brazil real 3.2277 0.15 0.67 Mexico peso 18.59 -0.13 11.59 Chile peso 638.1 -0.64 5.11 Colombia peso 3005 -0.74 -0.12 Peru sol 3.236 0.03 5.50 Argentina peso (interbank) 17.31 0.20 -8.29 Argentina peso (parallel) 18.06 -0.22 -6.87
(Reporting by Bruno Federowski; Editing by Lisa Von Ahn and Tom Brown)