(Recasts throughout, updates prices, adds market strategist's quote) By Aaron Saldanha May 8 (Reuters) - An index of Latin American stocks rose on Wednesday, propped up by robust Brazilian shares gaining on optimism around a pension reform proposal, while most Latin American currencies firmed against a listless dollar.
The latest round of U.S.-China trade talks start on Thursday, the results of which will broadly set the tone for Latin American markets. China is a key importer of a large chunk of the region's resources exports.
MSCI's index of Latin American stocks rose 1.5%, with shares in index heavyweight Brazil gaining as Economy Minister Paulo Guedes made the case for pension reform to lawmakers at a special committee hearing in Congress.
Angelo JR Amaral, an investment advisor at SVN, said Guedes' testimony showed the government was working collectively and that the cohesion indicated it was learning from mistakes made earlier.
Investors view reform to Brazil's bloated pension system as crucial to improving the fiscal position of Latin America's top economy.
Stocks on the Bovespa index climbed 1.3%, with gains seen across most sectors.
Oil firm Petroleo Brasileiro SA (Petrobras) saw its common shares and preferred shares rise 3.4% and 3.9%, respectively, despite missing analysts' profit estimates in its first-quarter earnings.
Petrobras executives told analysts the state-run firm was on course to hit its annual production target.
Gun maker Taurus' preferred shares surged 23.5% after Brazilian President Jair Bolsonaro late on Tuesday signed a decree easing access to guns and ammunition.
Shares of Vale SA fell 1.4%, against a backdrop of lower Dalian-traded iron ore futures. The miner said its iron ore production and sales slumped in the first quarter from a year earlier, reflecting the impact of a deadly dam collapse in January.
Brazil's real surged 1.1%, fueled by the optimism linked to the reform proposal.
The central bank kept borrowing costs at 6.5% after markets closed, as investors widely expected.
Argentina's stocks rose 3.2%, while the peso firmed.
Mexican stocks slid 0.4%, ending lower for a twelfth straight session in their worst losing streak in more than three decades. The peso softened 0.3%.
Chilean equities slipped 0.4% to close at their lowest in over four months. Chilean consumer prices rose 0.3 percent in April, data showed.
Colombia's peso firmed 0.2%, while local stocks tacked on 0.8%.
Energy firm Ecopetrol SA ended 3% higher, aided by firmer oil prices.
Latin American stock indexes and currencies at 2051 GMT Stock indexes daily % Latest change MSCI Emerging Markets 1050.94 -0.58 MSCI LatAm 2702.46 1.45 Brazil Bovespa 95596.61 1.28 Mexico IPC 43410.74 -0.4 Chile IPSA 5060.47 -0.36 Argentina MerVal 33775.97 3.16 Colombia IGBC 12529.76 0.77 Currencies daily % change Latest Brazil real 3.9266 0.15 Mexico peso 19.0870 -0.29 Chile peso 684.2 0.09 Colombia peso 3291.43 0.22 Peru sol 3.316 -0.09 Argentina peso (interbank) 45.0000 0.67 (Reporting by Aaron Saldanha in Bengaluru, Additional reporting by Paula Arend Laier in Sao Paulo, Editing by Rosalba O'Brien)