EMERGING MARKETS-Latam FX advances as dollar weakens on dour economic data

* Mexico's Walmex down after Q4 results * FX up 0.1%, stocks add 0.3% By Shashwat Chauhan Feb 15 (Reuters) - Most Latin American currencies advanced on Thursday as the dollar softened after a bigger-than-expected fall in U.S. retail sales, with Brazil's real and the Colombian peso leading the charge. By 10:05 a.m. ET (1505 GMT), MSCI's gauge of Latin American currencies gained 0.1%, while stocks gained 0.3%. The dollar index, which measures the greenback against a basket of major peers, fell 0.4% after data showed U.S. retail sales fell more than expected in January, declining 0.8% against forecasts of a 0.1% fall. The Brazilian real rose 0.1% to 4.9665 per dollar early on a holiday-shortened week for Brazilian markets. Brazil's main stock index gained 0.2%, lifted by rising utilities and consumer staples shares. The government of the State of São Paulo announced the beginning of the public consultation process on the documents for the privatization of Sabesp. Its shares were last up 4.2%. Chile's peso advanced 0.2%, on track to extend gains after rising more than 1% in the previous session. Minutes from the country's January central bank meeting showed policymakers considered reducing the benchmark interest rate by either 100 or 125 basis points, with one rate setter thinking it was appropriate to analyze the option of 150 bps. "Overall, all members agreed on the need to reduce the policy rate at a faster pace, but the majority preferred to cut 100 bps as this option had the advantage of not surprising the market," strategists at Citi wrote in a note. Oil exporting Mexico's peso held steady at 17.07 per dollar, while Colombia's peso advanced 0.3% against the dollar ahead of fourth quarter GDP numbers due later in the day. Mexican shares gained 0.3% early on, while Walmex fell 1.8% after Mexico's biggest retailer reported fourth-quarter results. The Peruvian sol was an outlier, down 0.2% after rising nearly 0.2% in the previous session. Most Latin American currencies have been under pressure this week, hurt by the dollar's recent resurgence following a surprise uptick in January U.S. consumer prices. Stocks in Buenos Aires gained 1.4% in the lead up to a reading of year-on-year January consumer prices due later in the day. Stocks in Chile and Colombia rose 1.4% and 0.2%, respectively. HIGHLIGHTS ** Colombia central bank should proceed with caution on rate reductions, says IMF ** Nigeria inflation approaches 30%, highest since mid-1996 Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging 1008.26 0.94 Markets MSCI LatAm 2532.24 0.3 Brazil Bovespa 127315.09 0.23 Mexico IPC 57393.38 0.25 Chile IPSA 6166.05 1.36 Argentina MerVal 1121007.5 1.395 8 Colombia COLCAP 1239.30 0.17 Currencies Latest Daily % change Brazil real 4.9670 0.06 Mexico peso 17.0566 0.10 Chile peso 957.4 -0.13 Colombia peso 3907.43 0.26 Peru sol 3.87 -0.23 Argentina peso 834.5000 -0.06 (interbank) Argentina peso 1075 2.79 (parallel) (Reporting by Shashwat Chauhan in Bengaluru; Editing by Andrea Ricci)