EMERGING MARKETS-Latam stocks, currencies rise; Brazil's real hits 10-week high

By Susan Mathew Oct 16 (Reuters) - Latin American stocks rose on Tuesday as risk appetite improved due to a rebound on Wall Street and European stock markets, while the region's currencies firmed against a weaker dollar. Data showing U.S. industrial output rose more than expected did little to cheer dollar bulls. The greenback was sent to three-week lows after tepid U.S. retail sales data on Monday. "The day begins with a lower feeling of risk aversion, so the dollar generally loses ground against most currencies," analysts at CI Banco said in a note. Wall Street's bounce after strong earnings from bellwether firms added to the positive sentiment toward developing market assets, which were lifted by a recovery in volatile Italian assets, and news that Saudi Arabia would acknowledge the death of a missing journalist in a botched interrogation. Mexico's peso strengthened for a fourth straight day, while the Argentine peso traded higher, coming back strong after a three-day weekend. Brazil's real firmed more than 1 percent to its highest point in 10 weeks, driven by ongoing investor optimism over the prospect that the far-right presidential candidate would win a run-off vote later this month. Among stocks, Sao Paulo's Bovespa stock index extended gains for a second day, with iron ore miner Vale's shares rising 1.5 percent a day after it reported record high output in the third quarter. Airliner Gol Linhas Aereas Inteligentes SA rose 6.5 percent, sustaining gains after announcing plans to buy out minority shareholders in its loyalty program Smiles Fidelidade , while Smiles was the biggest gainer on the index. Shares of Smiles plunged 40 percent on Monday after news of the deal. Mexico's IPC index rose, with shares of petrochemicals company Alpek leading gains with its 3.7 percent rise, after posting positive third-quarter results. Key Latin American stock indexes and currencies at 1425 GMT: Stock indexes Daily % YTD % change change Latest Brazil Bovespa 84789.58 1.72 10.98 Mexico IPC 48078.62 0.71 -2.58 Chile IPSA 5184.15 0.76 0.76 Argentina MerVal 30056.75 1.55 -0.03 Colombia IGBC 12315.02 -0.25 8.31 Currencies Daily % YTD % change change Latest Brazil real 3.7047 0.78 -10.56 Mexico peso 18.7598 0.39 5.01 Chile peso 671 1.27 -8.40 Colombia peso 3052.5 1.27 -2.31 Peru sol 3.331 0.12 -2.82 Argentina peso (interbank) 36.5500 0.66 -49.11 Argentina peso (parallel) 37.25 1.34 -48.38 (Reporting by Susan Mathew in Bengaluru Editing by Paul Simao)

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