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EMERGING MARKETS-Latam up, Brazil markets stage comeback

(Recasts throughout, updates prices) By Susan Mathew March 28 (Reuters) - Latin American markets rose on Thursday recovering from last session's steep falls as Brazil markets jumped with the country's political top brass trying to assuage investors after rising uncertainty around crucial economic reforms had sparked a sell-off on Wednesday.

Brazil stocks rose 2.7 percent on broad-based gains, after losing 3.6 percent in the previous session, while the real finished up 2.4 percent rebounding from Wednesday's almost 3 percent dive. Both posted their best day since Jan. 2.

Tensions around the reforms emerged as President Jair Bolsonaro was seen as not doing enough to push through the pension reform as its made its way through Congress, with House Speaker Rodrigo Maia's being openly critical of the leader.

The political finger pointing that ensued hurt markets as the Bolsonaro government seemed to be losing its momentum. On Thursday, Bolsonaro, Economy Monster Paulo Guedes and Maia publicly buried the hatchet, aiding a rebound in markets.

But, analysts were not convinced by the apparent patch up, and warned that volatility may continue till the reforms get passed.

"In spite of volatility and all the noise, there does not seem to be any substantial change in the local scenario," said strategist Dan Kawa, a partner at TAG Investimentos, in note to customers.

Investors seemed to look past the local central bank cutting the country's 2019 economic growth forecast, and data showing Brazil's trade balance swung to deficit in February from the previous month.

A host of strong results also helped boost the benchmark Bovespa index.

Mexico's peso was little change, having hit session highs of about 0.3 percent, or 19.295 per dollar, after the central bank stood pat on its key rate, as expected.

The bank, however, did flag rating risks to crisis-hit state-oil firm Pemex and to Mexico's sovereign debt.

Mexican stocks, which were the only gainers among regional shares on Wednesday, ended marginally lower.

The Argentine peso rose, breaking a seven-session losing streak, as the central bank announced new measures to allow banks to invest more in high-interest Leliq short-term notes, which should boost peso deposits by encouraging higher rates for depositors.

But, Matías Roig, director of Portfolio Personal Inversiones, expects volatility to continue, saying focus will not just be on stabilizing the peso but also on the government to find measures to handle it. He said that uncertainty going into elections in October might also add to large swings.

Among other markets, a cautious rise in world shares on signs of progress in U.S.-China trade talks helped regional stock indices. Stocks in Argentina rose 2.2 percent, while those in Chile shares tacked on 0.8 percent.

Key Latin American stock indexes and currencies at 2100 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1045.21 0.11 MSCI LatAm 2686.40 1.44 Brazil Bovespa 94388.94 2.7 Mexico IPC 42942.23 -0.01 Chile IPSA 5214.02 0.77 Argentina MerVal 32902.18 2.26 Colombia IGBC 12917.83 0.02 Currencies Latest Daily % change Brazil real 3.9005 2.4 Mexico peso 19.3350 0.105 Chile peso 683.2 -0.07 Colombia peso 3173.45 0.01 Peru sol 3.32 -0.09 Argentina peso 43.6300 0.62 (interbank) (Reporting by Susan Mathew in Bengaluru; Addtional reporting by Paula Arend Laier in Sao Paulo, and Walter Bianchi and Jorge Otaola in Buenos Aires; Editing by Sandra Maler)