(Rewrites throughout with updated prices, adds market strategist comment) April 1 (Reuters) - An index of Latin American stocks started the second quarter strongly on Monday, hitting its highest level in a week and a half, with resources stocks contributing significantly to the gains as unexpectedly strong Chinese data broadly pushed commodity prices higher. Currencies in Latin America also firmed against a tepid dollar as appetite for riskier assets rose. Data showed factory activity in China, a main destination for Latin America's resources, grew for the first time in four months in March. "Our bullish emerging markets call has received a shot in the arm from better data coming out of China," wrote Morgan Stanley strategists in a note to clients. "Most EM assets and FX should rally from here, but despite China being the reason for renewed economic optimism" assets and currencies in developing countries beyond Asia apart from Japan should be doing best, the note said. MSCI's index of Latin American stocks rose 1.3 percent, on the back of gains in index heavyweights Brazil and Mexico. MSCI's Latin American currencies index gained 0.8 percent. Brazil's real firmed 1.7 percent to a near one-week peak, while Sao Paulo-traded stocks tacked on 0.7 percent primarily on gains among materials and financials to end well above the 96,000-point mark. Mining firm Vale SA jumped 3.3 percent, as strong global iron ore prices helped overcome news the iron ore giant failed to obtain stability certificates for 13 dams under review following the rupture of another dam in January that killed hundreds. A more than 2 percent jump in oil prices as they hit 2019 highs failed to prop up state-run oil firm Petroleo Brasileiro SA (Petrobras), whose common shares and preferred shares fell 0.9 percent and 0.2 percent, respectively.
State-owned lender Caixa Econômica Federal has
invited investment banks to submit proposals to manage the sale of its 9-billion-reais ($2.33 billion) Petrobras stake, a source told Reuters. Mexican stocks rose 0.9 percent, aided by materials stocks, while the peso jumped 1.5 percent in the currency's best one-day showing since July 2018. Argentina's peso appreciated for a third straight session as it distanced itself further from a record low seen last week. Argentina's central bank announced an interest rate floor of 62.5 percent, as it seeks to contain inflation and ease concerns about a run on the currency. Colombia's peso, which has a moderate correlation with Brent crude, firmed 1.4 percent in its best one-day performance in more than two months. A 1.3 percent rise in shares of energy firm Ecopetrol SA helped contain the Colombian benchmark's loss to 0.2 percent. Chile's peso rose 1.7 percent, riding a wave of swelling global risk sentiment, as it notched its biggest gain in close to three months. Latin American stock indexes and currencies at 2051 GMT:
Stock indexes Latest Daily pct
change
MSCI Emerging Markets 1,070.09 1.13MSCI LatAm 2,782.90 1.34Brazil Bovespa 96,054.45 0.67Mexico IPC 43,672.06 0.9Chile IPSA 5,256.67 -0.05Argentina MerVal 33,070.73 -1.18Colombia IGBC 13,037.57 -0.17Currencies Latest Daily pct
change
Brazil real 3.8552 0.48Mexico peso 19.1456 1.44Chile peso 671.7 1.16Colombia peso 3,140.65 1.44Peru sol 3.307 0.33Argentina peso (interbank) 42.7300 1.45
($1 = 3.8672 reais)
(Reporting by Aaron Saldanha in Bengaluru; editing by Grant McCool)