By Sruthi Shankar

April 1 (Reuters) - Chilean stocks scaled fresh highs on

Monday, aided by positive domestic and Chinese economic data,

while the Turkish lira strengthened following the ruling party's

defeat in the local elections.

The leading index of Chile's stock market IPSA

climbed 1.2% to an all-time high, leading gains among Latin

American equity markets.

Data showed economic activity in Chile, the world's largest

copper producer rose, 4.5% in February, the biggest year-on-year

increase in almost two years, reinforcing its positive momentum

after a major beat in the previous month.

Further helping the mood, copper prices rose after positive

industrial data from top metals consumer China raised the

outlook for copper.

However, the Chilean peso came under pressure ahead

of Tuesday's central bank meeting where policymakers are

expected to deliver a 75-basis-point rate cut to 6.50%.

Overall, developing world currencies struggled on Monday as

the dollar rose after data showed the U.S. manufacturing sector

grew in March for the first time since September 2022, tempering

traders bets on the Federal Reserve cutting rates in June.

The Brazilian real eased 1%, while the Mexican peso

dipped 0.6%.

An exception was the Turkish lira, which firmed about

1% after Turks dealt President Tayyip Erdogan and his party

their biggest electoral blow on Sunday in a nationwide local

vote that reasserted the opposition as a political force.

The lira firmed to below 32 to the dollar after having

earlier dipped to 33, a new record low, in thin overnight trade.

Many European markets were closed on Monday for the Easter

holiday.

"Looking ahead beyond the elections and the rate hike, we

argue that the prospects for reviving high quality capital

inflows and attaining a lasting macroeconomic stability will be

determined by policymakers' ability to put forward a credible

narrative," noted Citi economist Ilker Domac.

"We don't foresee major reversals from the normalization

path in the near-term."

Analysts said Turkey's near 70% inflation rate, slowing

economic growth and an aggressive monetary tightening campaign

that has jacked up borrowing costs had hurt the AKP result.

Turkey's BIST 100 edged up 0.2%, with banks

providing a big boost.

HIGHLIGHTS:

** Erdogan vows to make amends after humbling election loss

in Turkey

** China's factory activity expands at fastest clip in 13

months, Caixin PMI shows

** Indonesia March inflation quickens to fastest in 7 months

** Argentina's markets closed for local holiday after Easter

Key Latin American stock indexes and currencies:

Latest Daily %

change

MSCI Emerging Markets 1040.91 -0.22

MSCI LatAm 2507.22 -1.09

Brazil Bovespa 127318.40 -0.61

Mexico IPC 57555.03 0.32

Chile IPSA 6679.63 1.24

Colombia COLCAP 1344.84 0.89

Currencies Latest Daily %

change

Brazil real 5.0645 -0.97

Mexico peso 16.6482 -0.61

Chile peso 985.1 -0.51

Colombia peso 3860.83 -0.10

Peru sol 3.7306 -0.40