*

Latam stocks up 0.4%, FX adds 0.3%

*

Both indexes eye weekly gains

By Shashwat Chauhan

May 17 (Reuters) - Brazil's real outpaced peers on

Friday, tracking higher commodity prices, while most other

currencies lagged as a recent rally fueled by optimism that the

U.S. Federal Reserve could start cutting interest rates soon

appeared to dissipate.

Brazil's real appreciated 0.4% against the dollar as

prices of iron ore, one of the country's top exports, jumped on

brighter demand outlook in top commodities consumer China.

China announced "historic" steps to stabilise its crisis-hit

property sector, with the central bank facilitating 1 trillion

yuan ($138 billion) in extra funding and easing mortgage rules,

and local governments set to buy "some" apartments.

"Unlike previous efforts to stimulate housing demand,

however, the current round of measures includes plans for local

governments and state firms to step in and buy up unsold homes,"

said Julian Evans-Pritchard, head of China economics at Capital

Economics.

"This could provide a more meaningful boost to home sales if

the scheme is backed up with sufficient funding. A lot remains

unclear, but the early details are encouraging."

Mexico's peso rose 0.3% to trade at 16.6 per dollar,

on track for its third successive weekly advance.

The Chilean peso held steady at 898.41 per dollar

after rising for the last four sessions, set for a fifth

straight weekly gain.

Colombia's peso lost 0.2% in thin trading, while

Peru's sol dipped 0.7%.

Most Latin American currencies eyed weekly gains as risk

sentiment flourished this week after data on Wednesday showed

U.S. consumer prices increased less than expected in April,

bolstering hopes that the Fed could kick-start its policy easing

cycle as early as September.

As of 10:32 a.m. EDT (1432 GMT), MSCI's index for Latin

American currencies gained 0.3%, while a gauge

for stocks advanced 0.4%. Both indexes were on

track for modest weekly gains.

Brazil's main stock index shed 0.2%, as losses in

energy and information technology shares weighed.

Energy firms 3R Petroleum and Enauta

said they had reached an agreement to merge in an all-stock

deal. 3R's shares rose over 3%, and Enuata was last up close to

1%.

Bourses in Mexico, Chile, Colombia

and Peru rose between 0.1% and 0.4% early

on, while Argentinian stocks dipped.

HIGHLIGHTS

** Brazil's central bank chief says he cannot anticipate

future rate cuts

** Chile central bank to cut interest rate to 6% in May,

poll suggests

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1100.15 0.14

MSCI LatAm 2502.74 0.37

Brazil Bovespa 128001.57 -0.22

Mexico IPC 57616.05 0.27

Chile IPSA 6672.89 0.32

Argentina MerVal 1480817.09 -0.036

Colombia COLCAP 1423.68 0.44

Currencies Latest Daily % change

Brazil real 5.1110 0.37

Mexico peso 16.6180 0.31

Chile peso 898.2 -0.09

Colombia peso 3833.7 -0.25

Peru sol 3.7419 -0.59

Argentina peso 886.5000 0.00

(interbank)

Argentina peso 1080 1.85

(parallel)