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EMERGING MARKETS-Chile's peso outperforms; Peru's sol drops ahead of elections

 (Adds comments, updates prices throughout)
    By Susan Mathew and Shreyashi Sanyal
    May 31 (Reuters) - Chile's peso outperformed Latin American
peers on Monday as prices for the country's top export, copper,
rose on supply concerns, while the Peruvian sol fell ahead of
final round presidential elections on June 6.
    The Chilean peso rose 0.2% as a strike by a union of
remote operations workers at BHP's Escondida and Spence copper
mines in Chile disrupted supply.
    On the month, however, the currency in on track to mark
losses of about 1.7% with a crackdown in China in the past few
weeks after the government's vow to stabilize commodity prices
hit copper prices.
    Peru's sol fell 0.7% to 3.8348 per dollar in low
volumes owing to a market holiday in United States. Peru's two
presidential candidates, right-wing Keiko Fujimori and socialist
Pedro Castillo, are neck-and-neck in opinion polls.
    The election could tilt the country, a relative safe haven
for investors in Latin America, sharply to the left or see the
Fujimori family return to power.
    Eyes are also on mid-term elections in Mexico, also on June
6, to see if President Andres Manuel Lopez Obrador's party gets
a super majority, an outcome that would leave little opposition
to carry out proposed reforms to the detriment of markets. 
    The Mexican peso fell 0.1% but was on course for its
third straight month of gains. 
    In Brazil, the real was down 0.1% at 5.2191 against
the dollar. But the currency is up about 4% this month, among
the best monthly performers in May. 
    "The uncertainty in the pandemic outlook and high fiscal
noises still make us estimate the USD/BRL at 5.35 by end-21 and
5.20 by end-22," said strategists at Rabobank in a client note. 
    Most Latin American currencies are set to mark gains for the
month. 
    "We expect the cyclical (global economic) recovery momentum
to persist in the second half of the year, albeit with some
bouts of volatility as the (U.S. Federal Reserve) prepares the
market for the discussion over tapering bond purchases," said
strategists at UBS.  
    Among stocks, gains in Brazil's Bovespa were led by
iron ore miner Vale, which tracked the steel-making
ingredient's prices higher.
        
    Key Latin American stock indexes and currencies at 1849 GMT:
    
          Stock indexes                   Latest    Daily %
                                                    change
 MSCI Emerging Markets                     1376.87     1.18
 MSCI LatAm                                2561.70     0.82
 Brazil Bovespa                          125884.74     0.26
 Mexico IPC                               50916.56     1.75
 Chile IPSA                                4288.13     0.69
 Argentina MerVal                         59207.96   -0.008
 Colombia COLCAP                           1212.58     0.49
                                                           
              Currencies                  Latest    Daily %
                                                    change
 Brazil real                                5.2191    -0.13
 Mexico peso                               19.9350    -0.15
 Chile peso                                  722.3     0.19
 Colombia peso                             3705.75     0.00
 Peru sol                                   3.8348    -0.65
 Argentina peso (interbank)                94.6800    -0.12
                                                    
 Argentina peso (parallel)                     154     1.95
                                                    
 
    

 (Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru;
Editing by Angus MacSwan)
  
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