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EMERGING MARKETS-Brazil's real dips again; trade optimism boosts Bovespa

By Sruthi Shankar

By Sruthi Shankar Nov 7 (Reuters) - Brazil's real dipped on Thursday, adding to its worst decline in three months, after the country held a disappointing second round of oil auctions, although optimism over a U.S.-China trade deal and positive earnings supported Brazilian stocks. The real dropped 0.4% to 4.098 per dollar. The currency had shed about 2.2% on Wednesday after Brazil's biggest-ever oil auction frustrated investors' expectations as high prices and the dominant role of state-run oil company Petrobras scared off global oil majors. The country held a second disappointing oil auction on Thursday, with major global oil firms passing again. The only block awarded in Thursday's auction went to Petrobras, and Chinese state firm CNODC, which offered the minimum bid. Four other blocks received no bids. "While Petrobras' win might remove the need to buy USD, the result meant that there would be close to no inflow to the country by way of signing bonuses," Citi's Dirk Willer wrote in a client note, adding that "we think the market will unwind some of the (BRL) outperformance over the past two weeks." Sao Paulo-listed shares, however, gained 0.6% as stock markets across the globe rose after China's Commerce Ministry said the United States and China were working on a deal that would roll back trade tariffs in different stages. Shares in Banco do Brasil SA rose 0.3% after it reported a 33.5% jump in third-quarter profit, and Switzerland's UBS Group AG said the two banks are set to launch an investment bank in South America. The top gainer on the index was refiner Ultrapar Participações SA, which was up 6% after it reported better-than-expected net income in the third quarter. Airline Azul SA fell 0.4% after reporting a net loss of 438 million reais, affected heavily by the depreciation of the real. Trade optimism helped the Chilean peso hold steady even as data showed the country's export revenue plunged by one-fifth to $5.3 billion in October, as the value of copper exports from the world's top producer fell. Mexico's peso was also little changed after data showed inflation stayed close to the central bank's 3% target in October, fueling expectations of further interest rate cuts. A jump in oil prices to more than $62 per barrel helped Colombia's peso gain 0.2%. Key Latin American stock indexes and currencies at 1435 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1073.04 0.39 MSCI LatAm 2779.06 -0.27 Brazil Bovespa 108988.17 0.58 Mexico IPC - - Chile IPSA 4607.08 0.17 Argentina MerVal 35674.41 0.49 Colombia IGBC - - Currencies Latest Daily % change Brazil real 4.0980 -0.42 Mexico peso 19.1518 -0.06 Chile peso 740.9 0.01 Colombia peso 3329.49 0.17 Peru sol 3.3398 -0.02 Argentina peso (interbank) 59.6000 0.10 (Reporting by Sruthi Shankar in Bengaluru Editing by Paul Simao)