By Aaron Saldanha April 24 (Reuters) - Latin American stock markets broadly fell on Wednesday, with sharp losses seen among Brazil's stocks as cheer on a pension reform proposal passing a congressional hurdle wore off, while currencies in Latin America were pressured by a firm dollar.
The proposal to reform Brazil's giant pension system - much awaited among investors - cleared a congressional committee amid much debate late on Tuesday, but it is not yet out of the woods.
In broader Latin America, a robust dollar pressured regional currencies.
Neil Dwane, global strategist at Allianz Global Investors, told the Reuters Global Market Forum most of the optimism around Brazilian pension reform is already baked into local assets and domestic growth is now needed in Latin America's top economy.
"In general, I think many (investors) are overweight Brazilian equities but not their bond markets, which could be attractive with reform and lower inflation. At least Brazil is not yet going backwards like Mexico and Argentina." MSCI's index of Latin American stocks fell 1.5%, as bourses across the region dropped.
Sao Paulo-traded stocks slid 1.3% on broad-based losses, giving up a chunk of ground gained in a 2.8% rise over the three sessions through Tuesday.
Shares of miner Vale SA fell 1.5%, against a backdrop of Dalian-traded iron ore futures sliding 1.6% overnight.
Vale said it filed a lawsuit in the United States to force BSG Resources Ltd to pay it about $1.25 billion, as mandated by an arbitrator in a dispute over a joint venture in Guinea, plus interest and expenses.
Common shares and preferred shares of state-run oil firm Petroleo Brasileiro SA (Petrobras) gave up early gains to fall 1.4% and 0.3%, respectively.
Brazil's government detailed some additional terms regarding how winning bidders of a mega oil auction scheduled for later this year will compensate Petrobras for exploratory and infrastructure work executed.
Brazil's real slid 1.2% and was on course for its lowest closing level in close to a month Mexican stocks shed 1%, with conglomerate Alfa's shares down 5.3%, a day after it posted a steep drop in first quarter net profit.
The peso softened 0.4%. Mexican consumer price inflation quickened faster than expected in the first two weeks of April, official data showed on Wednesday.
Chile's peso fell 0.7% as a tailwind in the form of recovering prices of copper, the country's top export, proved an insufficient support. Stocks fell 0.5%.
Argentina's stocks benchmark fell 2.3%, while the country's peso slid to its lowest level in more than two weeks.
Colombia's peso weakened 1.1%, while stocks dropped 0.4%.
Latin American stock indexes and currencies at 1431 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1082.29 -0.69 MSCI LatAm 2719.26 -1.49 Brazil Bovespa 94661.11 -1.32 Mexico IPC 44705.78 -0.98 Chile IPSA 5189.43 -0.53 Argentina MerVal 30225.21 -2.27 Colombia IGBC 12948.01 -0.44 Currencies daily % change Latest Brazil real 3.9677 -1.16 Mexico peso 18.9782 -0.39 Chile peso 673.1 -0.80 Colombia peso 3209 -0.97 Peru sol 3.319 -0.24 Argentina peso (interbank) 43.4000 -2.24 (Reporting by Aaron Saldanha in Bengaluru; Editing by Andrea Ricci)