Stocks pop higher as investors scale back c.bank tightening bets



* EM stocks index set to end week higher

* Latam stocks join global rally

* Brazil's real fall; inflation tops estimates

* Colombian peso at lowest since March 2020

By Susan Mathew

June 24 (Reuters) - Emerging market shares rose on Friday as investors started to scale back bets on the extent of monetary policy tightening by major central banks, helping a gauge of stocks erase losses for the week.

MSCI's index of emerging market shares .MSCIEF jumped 1.6% and was on track to end a central bank heavy week about 0.6% higher after two weeks of losses.

Its currencies counterpart .MIEM00000CUS firmed 0.2%, cutting almost all weekly losses.

Markets has taken a hit earlier this week as investors fretted over a likely recession as central banks stuck to their aggressive tightening policies.

But as commodity prices fell, inflation fears eased somewhat and markets brought forward their views on the timing of rate cuts to counter a possible recession.

This prompted some flows into risky assets.

In Latin America, stocks joined a global rally, with regional bourses up between 0.9% and 0.1%.

But surging inflation kept investors on edge. A day after Mexican inflation data came in higher than expected, data showed Brazilian consumer prices rose more than expected in the month to mid-June, despite central bank attempts to control it.

Brazil's real BRBY fell 0.5%, but Mexico's peso MXN= outperformed, up 0.7% against a weaker dollar.

"The global energy crisis helps Mexico as a producer," said Juan Perez, director of trading at Monex USA.

Perez added that geopolitical changes in Latin America, which has seen some leftist candidates come to power, should support the peso as it favors Mexico's current leftist government.

Rising prices have reduced the popularity of Brazil's far-right President Jair Bolsonaro ahead of elections in October. Analysts have warned to brace for volatility in the run up to the elections as former president Luiz Inacio Lula da Silva retains his lead over the incumbent.

As copper prices plunged on the uncertainty over demand amid growth fears, Chile's peso CLP= dipped another 0.5% to record lows.

The currency has fallen more than 15% from this year's peak hit in late March, with a strike at Codelco, the largest copper producer in Chile and the world, leaving investors worries about a hit to copper output.

On Thursday, union leaders at Codelco reached an agreement with the company to end the strike.

In Colombia, the peso COP= slumped 1% to over two-year lows, with eyes on President-elect Gustavo Petro as he firms up congressional allies ahead of the administration's takeover in August.

Key Latin American stock indexes and currencies at 1400 GMT: Stock indexes

Latest

Daily %

change MSCI Emerging Markets

1010.48

1.52 .MSCIEF

MSCI LatAm

2039.79

-0.04 .MILA00000PUS

Brazil Bovespa

98125.88

0.05 .BVSP

Mexico IPC

46692.01

0.07 .MXX

Chile IPSA

4976.97

0.9 .SPIPSA

Argentina MerVal

-

- .MERV

Colombia COLCAP

1348.77

0.74 .COLCAP

Currencies

Latest

Daily %

change Brazil real

5.2521

-0.45 BRBY

Mexico peso

19.9109

0.45 MXN=D2

Chile peso

910.6

-0.89 CLP=CL

Colombia peso COP=

4120.6

-0.59 Peru sol

-

- PEN=PE

Argentina peso

124.2300

-0.10 (interbank) ARS=RASL


Reporting by Susan Mathew in Bengaluru; Editing by William Maclean

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