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EMERGING MARKETS-Bovespa top gainer among Latam markets, FX firms

(Recasts throughout; updates prices, adds quote from market analyst) By Aaron Saldanha May 21 (Reuters) - A Latin American stocks benchmark rose on Tuesday, boosted by strong gains in index heavyweight Brazil, and the region's currencies firmed broadly against the dollar as frosty U.S.-China ties marginally thawed.

The United States late on Monday allowed Huawei Technologies Co to buy U.S.-made goods until Aug. 19 in order to maintain existing telecoms networks and provide software updates to its smartphones, which helped global risk appetite to tick upward after being battered in the previous session.

MSCI's index of Latin American stocks rose 2.5%, while its Latin American currencies index gained 1%.

Sao Paulo-traded stocks surged 2.7%, distancing themselves further from an about 4-1/2-month low seen on Friday.

Thiago Salomão, an analyst at Rico Investimentos, said there was a buying opportunity among Brazilian stocks following last week's 4.5% slide, adding the market on the day was building on the previous session's gains.

State-run oil firm Petroleo Brasileiro SA (Petrobras) saw its common shares and preferred shares rise 2.2% and 3.1%, respectively, supported by higher oil prices .

The Petrobras board approved an addendum to a transfer-of-rights oil contract that will see it reimbursed to the tune of $9.06 billion, although the deal is subject to governmental agreement.

CPFL Energia SA traded 3.1% higher. The utility offered to buy the stake of China's State Grid in its renewables arm CPFL Renovaveis.

Shares of miner Vale SA rose 1.7%, following a gain in Dalian-traded iron ore futures earlier in the global day.

Brazil's currency jumped 1.1%, while yields on local 10-year bonds slid 17 basis points to 8.84%.

Mexican stocks slid 0.7%, although the peso firmed 0.3%.

America Movil was trading 0.4% lower. El Salvador said it rejected the telecoms giant's bid to buy Spanish rival Telefonica's local unit on anti-trust grounds.

Argentina stocks rose 2.7%, on course for its highest closing level in more than two months, while the peso firmed.

Chilean equity markets were closed for a local holiday.

Colombia's peso firmed 0.4% as it recovered from a more than three-year low hit earlier in the session, while stocks tacked on 0.8%. Strong oil prices set the stage for Ecopetrol SA to rise 1.3%.

Latin American stock indexes and currencies at 1937 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 994.08 0.53 MSCI LatAm 2,544.95 2.52 Brazil Bovespa 94,424.29 2.7 Mexico IPC 43,232.90 -0.66 Chile IPSA - N/A Argentina MerVal 34,413.77 2.75 Colombia IGBC 12,203.41 0.83 Currencies Latest Daily % change Brazil real 4.0528 1.27 Mexico peso 19.0138 0.24 Chile peso 694.61 0.21 Colombia peso 3,339.05 0.33 Peru sol 3.34 0.21 Argentina peso (interbank) 44.7800 0.98 (Reporting by Aaron Saldanha in Bengaluru and Stefani Inouye in São Paulo; editing by G Crosse)