(Updates prices) SAO PAULO, Dec 19 (Reuters) - Brazil's Bovespa equities index fell sharply on Tuesday on concerns over the nation's fiscal health after a court struck down a measure intended to control government spending. On Monday, Brazil's Supreme Court suspended the effects of a decree by President Michel Temer, which would have put off adjustments to the salaries of federal workers for a year. That came as Brazil's Finance Minister Henrique Meirelles begins talks with major ratings agencies in a bid to avoid a credit downgrade, after lawmakers delayed voting on a key pension reform. "Another blow to fiscal adjustment, given that the measure should bring 4.4 billion reais ($1.34 billion) of savings next year," analysts at local brokerage Coinvalores said of the Supreme Court decision in a note to clients. Meirelles said in a radio interview on Monday that he will tell major ratings agencies that delaying a vote on a pension bill seen important to shoring up the nation's fiscal accounts does not mean it will not pass. However, lawmakers have warned that February is effectively the last chance for the unpopular bill. Brazil's Bovespa dropped 0.6 percent. Chile's peso rose 0.19 percent on Tuesday, as markets continue to price in the unexpectedly dominant win of investor favorite Sebastian Pinera in elections over the weekend. "Despite the fact that Sebastian Pinera's coalition will not have a majority in Congress, the change in government presents an opportunity to improve business confidence and should foster a continued macroeconomic rebound," Fitch said in a note. Mexico's IPC index and peso currency fell 0.45 percent and 0.74 percent, respectively, as U.S. legislators drew closer to passing a landmark tax reform. Investors are adopting caution due to uncertainty about how the tax reform will affect Mexico.
($1 = 3.29 reais)
Key Latin American stock indexes and currencies at 2052 GMT:
Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1133.11 0.24 31.09 MSCI LatAm 2759.30 -0.87 18.92 Brazil Bovespa 72680.37 -0.6 20.68 Mexico IPC 48415.94 -0.45 6.08 Chile IPSA 5588.09 -0.14 34.61 Chile IGPA 28035.80 -0.09 35.22 Argentina MerVal 27710.17 2.11 63.79 Colombia IGBC 11116.54 0.15 9.76 Venezuela IBC 1290.63 -0.03 -95.93 Currencies daily % YTD % change change
Brazil real 3.2894 0.20 -1.22 Mexico peso 19.2250 -0.74 7.90 Chile peso 620 0.19 8.18 Colombia peso 2968 0.24 1.13 Peru sol 3.281 -0.03 4.05 Argentina peso (interbank) 17.7000 -0.71 -10.31 Argentina peso (parallel) 18.11 0.77 -7.12
(Reporting by Gram Slattery; additional reporting by Julia Love; Editing by Susan Thomas)