(Recasts, updates prices, adds strategist's quote) By Aaron Saldanha Feb 12 (Reuters) - Most Latin American stock markets rose on Tuesday, buoyed by hopes of a U.S.-China trade deal as they more than recovered ground lost during the previous session, while resurgent risk appetite strengthened Latin American currencies against a softer dollar.
U.S. President Donald Trump said he expects to meet Chinese President Xi Jinping to close a deal on trade at some point, while officials from both countries expressed hopes on Monday a new round of talks would help improve strained trade ties between the world's top two economies.
Dan Kawa, a strategist and partner at asset manager TAG Investimentos, said risk appetite was helped by expectations of improved U.S.-China trade ties and signs another partial U.S. government shutdown may be avoided.
In 2018, the deep fissure between the two powers, combined with a strong dollar, hammered sentiment toward emerging markets and led to investors heading for the exits.
However, developing world assets have performed strongly this year - on a dovish outlook from the U.S. Federal Reserve and signs of thawing U.S.-China trade ties - prompting investors to term emerging markets as the "most crowded trade" for the first time in the history of a Bank of America Merrill Lynch survey.
MSCI's index of Latin American stocks rose 1.7 percent on Tuesday to post its best day since the end of January. MSCI's index of Latin American currencies gained 0.9 percent.
Sao Paulo-traded stocks tacked on 1.9 percent in their strongest one-day performance since early January on gains across the board.
Common shares of state-run oil firm Petroleo Brasileiro SA (Petrobras) gained 3.6 percent, their best day in about a month and a half, on strong oil prices. Preferred shares of Petrobras soared 3.5 percent.
Mining giant Vale SA jumped 5.4 percent, the most in nearly two weeks.
Argentina's stocks benchmark recorded an all-time closing peak, rising 1.8 percent, while the country's peso notched its weakest closing level of 2019 as the central bank resumed intervening in the currency market.
The dollar's weakness set the stage for a firming of Chile's peso as the currency overcame soft prices for copper , Chile's top export.
Colombian stocks rose 0.6 percent, while majority state-owned oil firm Ecopetrol SA gained 3 percent.
Mexico's peso firmed 0.2 percent, while local stocks were outliers, sliding 0.4 percent to a more than five-week closing low.
Miner Grupo México dropped 0.5 percent after reporting a lower fourth-quarter net profit.
Key Latin American stock indexes and currencies at 2134 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1042.13 0.65 MSCI LatAm 2856.98 1.7 Brazil Bovespa 96168.40 1.86 Mexico IPC 43113.79 -0.4 Chile IPSA 5384.88 0.18 Argentina MerVal 37685.96 1.79 Colombia IGBC 11953.46 0.64 Currencies daily % change Latest Brazil real 3.7094 0.07 Mexico peso 19.2483 0.26 Chile peso 659.8 0.25 Colombia peso 3124.5 0.40 Peru sol 3.329 0.09 Argentina peso (interbank) 37.9700 0.00 (Reporting by Aaron Saldanha in Bengaluru and Paula Arend Laier in Sao Paulo; Editing by Dan Grebler)