EMERGING MARKETS-Chilean markets rally as Pinera wins presidency

SAO PAULO, Dec 18 (Reuters) - Chilean stocks hit a record high on Monday and the peso soared after conservative Sebastian Pinera won a presidential election by a wider-than-forecast margin, fueling expectations of further business-friendly policies. An investor favorite in the $250 billion economy, Pinera's proposals are seen as pro-mining in the world's top copper producer. He has pledged support and stable funding for state-run miner Codelco, and has promised to slash red tape that had bogged down projects under outgoing President Michelle Bachelet. Chile's benchmark IPSA stock index jumped 7.3 percent in Monday trading. Shares of construction companies such as Besalco SA , Socovesa SA, Paz Corp and SalfaCorp SA rose more than 10 percent. Some banks and miners also advanced by double digits. "Pinera's campaign agenda focused on investment and growth, and we believe the administration will articulate policies with that aim, which should help to consolidate the upbeat business and consumer expectations," JPMorgan economists wrote in a report. "That said, Pinera's administration will need ... political savvy to negotiate laws in a fragmented Congress." The Chilean peso strengthened 1.8 percent against the dollar, its biggest one-day advance in a year and a half, leading gains the region. Other currencies were range-bound amid doubts whether a proposed U.S. tax cut would have a major impact on economic growth, after the bill moved over the weekend another step closer to passing. Uncertainty over whether the tax bill would indeed be pushed through, as well as questions over its pro-growth effects, have cast doubt on the outlook for inflationary pressures in the United States, which has boosted expectations of higher interest rates. Higher U.S. rates could dampen demand for high-yielding assets, such as currencies from emerging markets.

Key Latin American stock indexes and currencies at 1720 GMT:

Stock indexes daily % YTD % change change


MSCI Emerging Markets 1126.41 0.71 29.72 MSCI LatAm 2765.71 1.87 16 Brazil Bovespa 73121.50 0.71 21.41 Chile IPSA 5617.48 7.31 35.32 Chile IGPA 28098.86 7.11 35.52 Argentina MerVal 27050.38 0.11 59.89 Currencies daily % YTD % change change


Brazil real 3.2912 0.49 -1.28 Mexico peso 19.0810 0.13 8.72 Chile peso 624.5 1.84 7.40 Colombia peso 2986.44 0.25 0.50 Peru sol 3.293 -0.12 3.67 Argentina peso (interbank) 17.5600 -0.26 -9.60 Argentina peso (parallel) 18.04 -0.44 -6.76

(Reporting by Bruno Federowski; Editing by Frances Kerry)