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EMERGING MARKETS-LatAm stocks boosted by Brazil record high; FX weaker

Susan Mathew

(Recasts throughout, updates prices) Jan 17 (Reuters) - Most Latin American stocks rose on Thursday, with Brazil shares scaling new heights amid hopes that the new government's promised pension reforms plans may be revealed earlier than expected. The MSCI index of Latin American shares touched its highest level in eight months, with Sao Paulo's Bovespa stock index reversing early losses to close up 1 percent at an all-time high. Brazil's Economy Minister Paulo Guedes is expected to detail the pension reform proposal at the World Economic Forum's annual meeting in Davos next week, a government source said on Thursday. Brazilian President Jair Bolsonaro's chief of staff earlier this week had said that the government will settle on a model for its pension reform proposal only after Bolsonaro returns from Davos. "The stock market rises on news that the focus of the government in Davos will be on welfare reform and privatizations, in addition to news of falling import tariffs," said Pedro Menezes, a partner and member of the stock investment committee at Occam Brasil Gestão de Resources. Gains on the Bovespa were broad-based and driven by commodity stocks that were bolstered by higher prices for iron ore and recovering oil prices. Iron ore miner Vale SA's 3 percent rise was the biggest boost, followed by a 1.4 percent climb by shares of state oil company Petrobras. In Mexico, the benchmark IPC extended gains to a third straight session, while stocks in Buenos Aires climbed 0.6 percent, keeping up with the rise in major indexes on Wall Street. Regional currencies on the other hand, weakened against a steady dollar. Mazen Issa, a senior FX Strategist at TD Securities, expects world currency markets to be rangebound until the uncertainties around Britain's exit from the European Union clear up. He emphasizes the preference for the Japanese yen as the preferred safe-haven currency. The Mexican peso fell 0.6 percent against the dollar and posted its worst trading day in over a month, while Brazil's real hit a two-week low. The Argentine peso declined as the central bank hedged in dollars. Analysts expect this dollar buying to continue for the next 60 days. Bucking the trend, Peru's sol firmed 0.2 percent to an over three month high.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily

pct change

MSCI Emerging Markets 1,008.99 -0.04MSCI LatAm 2,835.03 0.04Brazil Bovespa 95,351.09 1.01Mexico IPC 43,964.78 0.33Chile IPSA 5,435.94 0.31Argentina MerVal 34,262.74 0.63Colombia IGBC 11,647.93 -0.07Currencies Latest Daily

pct change

Brazil real 3.7503 -0.10Mexico peso 19.0131 -0.66Chile peso 669.9 -0.20Colombia peso 3,130.3 -0.47Peru sol 3.325 0.18Argentina peso (interbank) 37.6800 -0.48

(Additional reporting by Paula Arend Laier in Sao Paulo and Walter Bianchi in Buenos Aires; editing by G Crosse)