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EMERGING MARKETS-Latam assets hold ground amid trade fears as Brazil's real firms

By Aaron Saldanha

* Trump signs bill on Hong Kong into law * China warns of retaliation * Brazil's real firms, rising off record low * Argentina's MerVal ticks higher By Aaron Saldanha Nov 28 (Reuters) - Latin American stocks rose on Thursday, as gains in index heavyweight Brazil more than offset creeping doubts about a U.S.-China trade truce, while most currencies in the region slipped as investors stayed away from riskier assets. Earlier in the day, China's Foreign Ministry warned of unspecified "firm counter measures" after U.S. President Donald Trump signed legislation backing pro-democracy protesters in Hong Kong. Global markets were trading lower as investors dialed back on their optimism of an initial trade agreement being signed soon, Gabriel Casillas, chief economist and head of research at Banorte Research, wrote in a note. MSCI's Latin American stocks index rose 0.3%, a move largely matched by the regional currencies benchmark due to gains in Brazil's real. Sao Paulo-traded equities rose 0.3% as consumer staples and industrials overshadowed a drop in energy stocks and a flagging financial sector, which were pressured by a cap on interest rates on overdraft credit. State-run oil firm Petroleo Brasileiro SA (Petrobras) fell 0.3%, as investors looked past the announcement of a planned expansion of output, paying more attention instead to a 0.6% decline in Brent crude futures. In a bright spot, Brazil's real firmed 0.9%, after hitting an all-time closing low on Wednesday, and was on course to snap a four-session losing streak. Meanwhile, yields on local 10-year bonds rose 7.5 basis points to 7.075%. Mexican stocks dipped 0.1%, while the peso softened by 0.4%. Minutes of the central bank's last monetary policy meeting released on Thursday showed the bank leaving the door open to future rate cuts against the backdrop of weaker than expected economic activity. Chile's peso notched a record low, pummeled by a double whammy of sliding prices of copper, the country's top export, on global trade fears and violent local protests. Stocks in Chile slid 2.2%. Meanwhile, Argentina's stocks rose 0.4%, while the peso marked time. President-elect Alberto Fernandez, who takes office next month, said he did not want to fall short on the country's debt obligations. Colombia's peso softened 0.4%, while stocks rose 0.7%, on course to record a closing gain for the first time this week, aided by rising financials such as Bancolombia . Latin American stock indexes and currencies at 1747 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1050.51 -0.23 MSCI LatAm 2644.36 0.3 Brazil Bovespa 107978.86 0.25 Mexico IPC 42976.25 -0.14 Chile SPIPSA 4494.82 -2.21 Argentina MerVal 34051.31 0.36 Colombia Colcap 1598.51 0.7 Currencies Latest Daily % change Brazil real 4.2316 0.62 Mexico peso 19.5795 -0.36 Chile peso 828.9 -1.46 Colombia peso 3516.89 -0.39 Peru sol 3.3898 -0.17 Argentina peso (interbank) 59.7700 0.02 (Reporting by Aaron Saldanha in Bengaluru; editing by Diane Craft)