EMERGING MARKETS-Chile stocks rise 2%, Brazil shares down for 6th day

Susan Mathew

(Updates prices)

* Brazil stocks log first weekly loss in six weeks

* Mexican peso at near nine-month high

* Brazil consumer inflation rises slightly above target

Jan 10 (Reuters) - Most Latin American stock markets rose on Friday as easing U.S.-Iran tensions and rising hopes for the signing of a Phase One U.S.-China trade deal lifted sentiment, while Mexico's peso notched a near nine-month high against the dollar. Chile shares closed at an 11-week high on Friday, while Mexican shares logged their third straight session of gains. Investor sentiment was dented earlier in the week on concerns of a rise in tensions between the United States and Iran after a U.S. drone strike that killed a top Iranian general. The absence of further military action by both countries and talk of a Sino-U.S. trade deal being signed next week helped investors regain some risk appetite, however. "Things have calmed down on signs that neither side wants to escalate things, and risk assets are trying to climb back," said Win Thin, global head of emerging market currency strategy at Brown Brothers Harriman. Brazil shares fell 0.2% in volatile trading to extend losses to a sixth session - its longest stretch of losses since May 2016, as lenders and energy stocks weighed. The market lost around 1.6% on the week after five straight weeks of gains, over which time it added 8.5%. Brazil's real firmed 0.1%, giving up some sessions gains. Consumer inflation in Brazil accelerated in 2019 to a three-year high, data showed on Friday, edging past the central bank's mid-point. Economists said the spike was not enough to change the outlook for weak inflationary pressures amid a sluggish economic recovery, leading some to forecast even lower interest rates this year after four rate cuts to record lows in 2019. "But inflation is high enough that the central bank has to be cautious about cutting rates," BBH's Thin warned. The central bank's next policy meeting is scheduled for Feb. 5. In Mexico, a day after data showed inflation fell further below its central bank's target, the national statistics agency said industrial output in November rose 0.8% from the previous month but fell 2.1 percent in unadjusted terms from November 2018. Mexico's peso rose 0.3% to its highest since April 2019. Chile's peso slipped 0.8%, tracking copper prices lower. The currency lost 1.2% this week after the central bank suspended interventions in the foreign exchange market that were introduced late last year when violent protests sent the currency to all-time lows.

Key Latin American stock indexes and currencies at 1949 GMT:

Stock indexes Latest Daily %


MSCI Emerging Markets 1133.09 0.33MSCI LatAm 2910.39 -0.24Brazil Bovespa 115741.00 -0.18Mexico IPC 44651.81 0.18Chile IPSA 4996.19 2Argentina MerVal 42868.34 1.981Colombia COLCAP 1652.97 -0.03Currencies Latest Daily %


Brazil real 4.0888 -0.11Mexico peso 18.7900 0.22Chile peso 771.8 -0.56Colombia peso 3268.2 -0.50Peru sol 3.331 -0.33Argentina peso 59.630 0.17


(Reporting by Susan Mathew in Bengaluru; Editing by Sonya Hepinstall)