EMERGING MARKETS-Election nerves weaken Brazil real; other LatAm currencies up

up@ BRASILIA, Sept 13 (Reuters) - Brazil's currency and main stock index fell on Thursday because of mounting concerns about this year's elections, with the real underperforming other Latin American currencies, which strengthened on weaker-than-expected U.S. inflation figures. The real slipped 1.3 percent, weighed by concerns that far-right presidential candidate Jair Bolsonaro, who was stabbed at a campaign event last week, may be unable to campaign even in a likely second-round vote. Bolsonaro, who successfully underwent emergency surgery overnight, has tapped a University of Chicago-trained banker as his main economic adviser. Though some investors believed he could gain ground after the incident as a result of a sympathy vote, a recent poll showed he would likely lose in the second round to most of his main rivals. Traders fear a leftist president would refrain from cutting government spending to curb debt, which they see as necessary to bring back Brazil's investment grade sovereign rating. Those concerns weighed down the Brazilian real on a day when currencies of Chile, Mexico and Colombia all rose more than 0.9 percent. The dollar fell to a near 1-1/2-month low against a group of other major currencies after data showed consumer prices in the United States increased less than expected in August, reducing traders' expectations of accelerating U.S. inflation. Weaker inflation could drive the Federal Reserve to hike rates more slowly, bolstering the demand for high-yielding, emerging-market assets. Risk appetite worldwide was also lifted by signs of reduced trade tensions between China and the United States after Washington reached out to Beijing on Wednesday to restart trade talks.

Key Latin American stock indexes and currencies at 1945 GMT:

Stock indexes daily % YTD %

change change Latest

MSCI Emerging Markets 1017.85 1.32 -13.28 MSCI LatAm 2419.95 -0.29 -14.19 Brazil Bovespa 74550.62 -0.76 -2.42 Mexico IPC 49680.95 0.86 0.66 Argentina MerVal 30286.95 1.82 0.74 Colombia IGBC 12228.08 -0.84 7.54 Venezuela IBC 354704.53 5.93 27981.

17

Currencies daily % YTD %

change change Latest

Brazil real 4.1981 -1.28 -21.08 Mexico peso 18.8450 0.93 4.53 Chile peso 681.41 0.95 -9.80 Colombia peso 3015.8 0.93 -1.12 Peru sol 3.314 0.48 -2.32 Argentina peso (interbank) 39.5500 -2.65 -52.97 Argentina peso (parallel) 38.25 -0.65 -49.73

(Reporting by Bruno Federowski; Editing by Bernadette Baum)