EMERGING MARKETS-Brazil's real rises, Chilean peso slides as copper prices fall

* Petrobras ends 4 divestment processes after review, shares fall * Bank of Israel leaves rates unchanged * U.S. markets closed for Labor Day * FX flat, stocks down 0.4% (Updated at 1902 GMT/ 3:02 pm ET) By Shashwat Chauhan Sept 4 (Reuters) - Brazil's real led gains among most Latin American currencies on Monday amid a rise in iron ore prices and as investors eyed more economic data this week, while sliding copper prices pressured top producer Chile's peso. The Brazilian real, which remains a top producer of iron ore, gained 0.3% against the softer dollar. Iron ore's most-active October contract on the Singapore Exchange hit a five -month high earlier in the session, while China's Dalian prices also rose amid optimism over Beijing's policy support for its struggling property sector. Consumer prices in Sao Paulo, Brazil's most populous city, fell 0.20% in August, from a decline of 0.14% in July, the IPC-FIPE index showed. Oil producer Colombia's peso added 0.2%, its third straight session of gains as crude prices edged higher. Chile's peso eased 0.9% on demand worries from top copper consumer China and rising inventories in London Metal Exchange-registered warehouses. "Perhaps sentiment could get a boost in the short term. But ultimately, it boils down to whether the (China) housing market can stabilize and if economic growth will find a floor," said Tommy Wu, senior economist at Commerzbank. Focus will also remain on Chile's central bank, which is scheduled to announce its decision on monetary policy on Tuesday. Mexico's peso lost 0.4%, its third straight session of declines. Mexican Senator Xochitl Galvez on Sunday rose as the 2024 presidential candidate of an opposition alliance set to take on President Andres Manuel Lopez Obrador's National Regeneration Movement (MORENA) in the 2024 election. Peru's sol added 0.6% after the previous week's fall. EM stocks fell 0.4% as Brazil's Bovespa stock index lost 0.1%. Shares of Petrobras dropped 1.0% after the Brazilian state-run oil company said it had decided to halt some key asset sales after concluding a broad revision of divestment processes that were launched during the country's previous administration. Inflation readings in Mexico, Colombia and more economic data out of Brazil due later in the week would be eyed as investors attempt to assess the outlook for interest rates in the continent. Trading volumes were subdued as markets in the United States were closed for the Labor Day holiday. Elsewhere in emerging markets, Israel's shekel gained 0.2% after the country's central bank left its interest rates unchanged. "The tone of the statement was overall neutral but with one hawkish element: the "real possibility" of further rate hikes reference was not yet removed," wrote Michel Nies, emerging markets economist at Citi. Key Latin American stock indexes and currencies at 3:02 pm ET (1902 GMT): Stock indexes Latest Daily % change MSCI Emerging Markets 995.19 0.96 MSCI LatAm 2375.10 -0.29 Brazil Bovespa 117782.3 -0.09 2 Mexico IPC 53197.23 0.1 Chile IPSA 5994.92 -0.02 Argentina MerVal 635829.1 0.163 4 Colombia COLCAP 1083.27 -0.13 Currencies Latest Daily % change Brazil real 4.9342 0.08 Mexico peso 17.1721 -0.56 Chile peso 858.9 -1.04 Colombia peso 4050.12 0.26 Peru sol 3.6865 0.03 Argentina peso (interbank) 350.0000 0.03 Argentina peso (parallel) 725 0.69 (Reporting by Shubham Batra, Shashwat Chauhan and Shreyashi Sanyal in Bengaluru; Editing by Alison Williams)