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EMERGING MARKETS-Latam stocks rise on U.S.-China trade optimism, FX firms

Aaron Saldanha

March 15 (Reuters) - Latin American stock markets rose along with global peers on Friday, helped by optimism on the U.S.-China trade front, while currencies in Latin America firmed against a dollar softened by weaker than expected U.S. data. Risk appetite was boosted after a Xinhua report said officials from the United States and China, a key destination for Latin American resources exports, made substantive progress on trade. The dollar weakened as data showed U.S. manufacturing output fell in February, underscoring the Federal Reserve's "patient" stance towards interest rate increases this year. MSCI's index of Latin American stocks rose 0.7 percent, while its Latin American currencies index gained 0.1 percent. The show-stealer among currencies was Argentina's peso , which firmed about 1.8 percent to its strongest level in more than a week, after the local central bank announced measures the day before aimed at tightening monetary policy.

Dirk Willer, Citi Research's head of emerging market strategy, and Kenneth Lam, emerging markets FX strategist, said in a note that the central bank's stricter measures and the finance ministry's sales of dollars confirmed on Thursday support their view the USD/ARS currency pair will fall towards the currency floor. Argentinean equities rose 0.7 percent. Those in neighboring Brazil tacked on 0.5 percent, as gains across most sectors outweighed losses among materials and energy stocks. Common and preferred shares of state-run oil giant Petroleo Brasileiro SA (Petrobras) managed to withstand pressure from lower oil prices as they eked out modest gains. Petrobras shares were supported by comments from its chief executive, Roberto Castello Branco, who said he believes the firm will have divested about $10 billion in assets in the first four months of 2019. The CEO of Caixa said the lender would sell its Petrobras stake. Brazilian stocks on the whole have enjoyed a strong week and are on course to end at its highest weekly closing level on record. Mexican stocks rose half a percent, as did the country's peso, which is seen by some investors as a weather vane of trade sentiment. Stocks in Chile rose 0.3 percent, as did the country's peso, which was supported by firm prices of top Chilean export copper. Colombia's peso firmed for a fourth straight day and was on course for its best closing level in more than a week, while local stocks rose 0.3 percent.

Key Latin American stock indexes and currencies at 1413 GMT

Stock indexes daily %Latest changeMSCI Emerging Markets 1056.99 0.84MSCI LatAm 2840.11 0.73Brazil Bovespa 99127.79 0.53Mexico IPC 41979.04 0.48Chile IPSA 5318.97 0.34Argentina MerVal 33777.13 0.74Colombia IGBC 12870.44 0.26Currencies daily %

change Latest

Brazil real 3.8310 0.42Mexico peso 19.2280 0.47Chile peso 669.3 0.27Colombia peso 3121.28 0.62Peru sol 3.297 0.03Argentina peso (interbank) 39.9500 2.08

(Reporting by Aaron Saldanha in Bengaluru Editing by Phil Berlowitz)