* Brazil Bovespa up 0.66 pct, Mexico IPC down 0.43 pct SAO PAULO, Dec 19 (Reuters) - Brazilian stocks reached their highest level in a over a week on Thursday after the U.S. Federal Reserve said it would begin to taper its monetary stimulus, removing a question mark that had been hanging over the market in recent months.
Chile's IPSA index erased the previous two sessions' losses, led by shares of lender CorpBanca, which jumped on reports it is close to selling part of the firm.
Mexico's IPC index gave back part of the previous session's gains as traders adjusted to the new U.S. monetary outlook.
The Fed's decision signals that the U.S. economic recovery is on a firmer footing and Brazil investors were encouraged by the Fed's dovish forward guidance on interest rates, analysts said.
Brazil's benchmark Bovespa stock index rose for the third session in four, adding 0.66 percent to 50,896.69.
Shares of the most widely-traded commodities firms and steelmakers, which tend to rise and fall on the outlook for global economic growth, drove gains in the index.
Steelmaker Usinas Siderurgicas de Minas Gerais SA , known as Usiminas, added 3.6 percent, while rival Companhia Siderurgica Nacional advanced 2 percent.
Investors were pleased that the Fed signaled the reduction of stimulus would occur at a very gradual pace, according to a report by local brokerage Planner on Thursday.
"The fact that the U.S. government didn't alter interest rates also reduces the risk of investor flight from emerging markets," the report said.
Shares of planemaker Embraer SA rose 0.5 percent the day after Brazil's government awarded a $4.5 billion contract to Saab AB to replace its aging fleet of fighter jets. Government officials said Embraer would be Saab's main local partner and that the transfer of technology would help Brazil develop future generations of fighter aircraft.
Chile's IPSA index rebounded from a two-day slump, rising 0.73 percent to 3,691.57.
Shares of lender CorpBanca soared nearly 15 percent, contributing most to the index's rise, on a report that the bank is close to selling a 50.1 percent stake that may be worth as much as $6 billion.
Mexico's IPC index slipped 0.43 percent to 41,900.96 as shares of heavily-weighted cement manufacturer Cemex fell 2.5 percent and telecommunications firm America Movil dropped 0.8 percent.
"What's happening is that yesterday we saw an important push (forward) after the Fed decision," said Rafael Camarena, an economist at Santander in Mexico City. "Now we're having a small adjustment." Latin America's key stock indexes at 1528 GMT: Stock indexes Latest daily % YTD % change change MSCI LatAm 3,157.84 -0.28 -16.62 Brazil Bovespa 50,896.69 0.66 -16.50 Mexico IPC 41,900.96 -0.43 -4.13 Chile IPSA 3,691.57 0.73 -14.18 Chile IGPA 18,164.39 0.54 -13.79 Argentina MerVal 5,405.70 -0.1 89.39 Colombia IGBC 13,010.93 0.24 -11.59 Peru IGRA 15,601.52 -0.67 -24.37 Venezuela IBC 2,695,213.8 0 471.70