EMERGING MARKETS-Brazil stocks rise on strong inflation data; Latam equities firm

Sagarika Jaisinghani and Susan Mathew


* Brazil equities gain after five straight days of decline

* Brazil 2019 inflation exceeds economists' forecast

* Investors turn optimistic as fears of Middle East war fade

* Mexican peso firms; Argentinian and Chilean stocks gain

Jan 10 (Reuters) - Brazilian stocks rose for the first time in six days on Friday on better-than-expected inflation figures, while the easing of U.S.-Iran tensions lifted Latin American equities. Brazil's stock index gained 0.4% and the real firmed 0.3% as data showed consumer prices rose at a faster-than-expected pace in 2019, mainly led by higher meat prices. The figures were the latest indication of a slight pickup in Latin America's largest economy and will potentially further delay interest rate cuts by the central bank after four consecutive reductions last year, analysts said. "In Brazil, the rate cut cycle had ended and inflation is high enough that the central bank has to be cautious about cutting rates (further)," said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman. "The takeaway is that the economy remains soft." Investor sentiment was dented earlier in the week on concerns of a additional strife in the Middle East after the United States killed a top Iranian general, prompting a retaliation. But in the absence of further military action by both countries, world stock markets notched record highs on Friday as investors turned optimistic about faster global growth in 2020. Wall Street also hit all-time opening highs, powered by tech stocks. Argentinian equities added 1.2%, while Chilean stocks rose 0.3%. A Reuters poll on Friday showed Chile's economy is expected to start expanding again in 2020 after intense social unrest last year. The Mexican peso firmed about 0.4% and was on track for its fifth weekly increase in six. Data on Friday showed Mexican industrial output rose 0.8% in November from October, the first monthly rise since August. The region's currencies will tread carefully this year amid continuing political tensions and worries over more protectionist talk in the U.S. presidential election campaign later in 2020, a Reuters poll of analysts showed.

Key Latin American stock indexes and currencies at 1459 GMT:

Stock indexes Latest Daily % changeMSCI Emerging Markets 1134.37 0.44MSCI LatAm 2926.32 0.31Brazil Bovespa 116412.85 0.4Mexico IPC 44594.21 0.05Chile SPIPSA 4913.54 0.31Argentina MerVal 42548.43 1.22Colombia Colcap 1651.98 -0.09Currencies Latest Daily % changeBrazil real 4.0738 0.26Mexico peso 18.7913 0.22Chile peso 771.8 -0.56Colombia peso 3274.23 -0.68Peru sol 3.3198 0.01Argentina peso (interbank) 59.8150 -

(Reporting by Sagarika Jaisinghani and Susan Mathew in Bengaluru; Editing by Dan Grebler)