By Bruno Federowski SAO PAULO, May 19 (Reuters) - Brazilian stocks and currency rebounded on Friday, as the worst selloff in several years triggered bargain-hunting amid a global pickup in investor appetite for higher-yielding emerging market assets.
The Brazilian real firmed 3.3 percent after plummeting 8 percent a day earlier, the biggest percentage drop since the currency was devalued in 1999.
The country's benchmark Bovespa stock index jumped 2.5 percent, with shares that suffered heavily on Thursday, including Cia Energética de Minas Gerais SA and Centrais Elétricas do Brasil SA, among the biggest gainers.
Brazilian markets tumbled after news reports said Brazil's President Michel Temer had been caught on tape condoning bribes to silence a key witness in Brazil's biggest-ever graft probe, fueling calls for his removal from office.
The uproar could derail his ambitious reform efforts, which are seen by investors as key to curbing the rise in public debt and lifting Brazil from its deepest recession on record.
After the story broke late on Wednesday, Temer strongly denied any wrongdoing and said he will not resign.
The rebound in Brazilian assets also came on the heel of a pickup in risk-appetite following sharp recent losses, as well as rising commodity prices from copper to oil.
Appetite for emerging market assets faded over the last week as the probe into U.S. President Donald Trump's administration's ties to Russia threatened his pledges of expansionist policies.
The Mexican peso strengthened 0.9 percent after touching a one-week low the day before, while the country's IPC stock index advanced following three straight days of losses.
Key Latin American stock indexes and currencies at 1615 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 999.83 1.16 14.63 MSCI LatAm 2,541.18 3.26 5.14 Brazil Bovespa 63,110.80 2.46 4.79 Mexico IPC 49,122.82 1.66 7.62 Chile IPSA 4,822.48 0.99 16.17 Chile IGPA 24,213.97 0.92 16.78 Argentina MerVal 21,521.75 2.31 27.21 Colombia IGBC 10,769.65 1.23 6.33 Venezuela IBC 71,227.77 7.16 124.66 Currencies Latest Daily YTD pct pct change change Brazil real 3.2721 3.34 -0.70 Mexico peso 18.6700 0.93 11.11 Chile peso 670.2 0.72 0.07 Colombia peso 2,889.26 1.10 3.88 Peru sol 3.269 0.31 4.44 Argentina peso (interbank) 15.8650 1.04 0.06 Argentina peso (parallel) 16.05 0.93 4.80 (Reporting by Bruno Federowski, editing by G Crosse)