EMERGING MARKETS-Latin American stocks fall amid Brazil weakness, currencies mixed

* U.S. inflation rose in-line with expectations * Brazil's Ambev falls after Q4 profit miss * Stocks down 0.3%, FX flat By Shashwat Chauhan Feb 29 (Reuters) - Latin American currencies were mixed on the last trading day of the month on Thursday, as investors parsed through a U.S. inflation reading, while a gauge of stocks lost ground on weakness in Brazilian shares. A gauge of Latin American stocks dropped 0.3% as heavyweight Brazil's main stock index fell 0.8% as losses in financial stocks weighed. Brazilian brewer Ambev lost 7.3% after missing fourth quarter net profit estimates. Stocks in Argentina rose 3.4%, while Mexican shares advanced 0.3%. At 10:09 a.m. ET (1509 GMT), MSCI's gauge for Latin American currencies was flat, on track for marginal monthly gains. Brazil's real was flat at 4.9673 per dollar after data showed the country's unemployment rate ticked up in the three months through January, but came in below market expectations. Average wages, a metric policymakers have been closely tracking, rose 1.6% on a quarterly basis and 3.8% year-on-year. "The behavior of real wages reinforces our call that services disinflationary process will remain sticky, narrowing room for Selic rate cuts with a 10% terminal rate," Citi economists wrote in a note. Last month, Brazil's central bank had cut its benchmark interest rate by 50 basis points for the fifth consecutive time to 11.25%. Meanwhile, the dollar index weakened after U.S. prices picked up in January, but the annual increase in inflation was the smallest in nearly three years, keeping a June interest rate cut from the Federal Reserve on the table. "Inflation continues to moderate despite upgraded outlooks for the U.S. economy ... today's numbers show just enough softening to keep worries at bay," David Russell, global head of market strategy at TradeStation said. Following the report, traders added to bets the U.S. central bank will cut rates in June. The Mexican peso edged 0.2% higher and was on track to be the best performing currency amongst local peers this month. Data from the national statistics agency showed Mexico's seasonally adjusted unemployment rate stood at 2.8% in January. Higher copper prices helped top producer Chile's peso rise 0.9%, though it was on track to be the worst performing currency among local peers this month, eyeing a decline of over 4.5% in Feb. Fellow copper producer Peru's sol also rose 0.1%, while Colombia's peso fell 0.2%. HIGHLIGHTS ** India's economy grows at its fastest pace in six quarters in election boost for Modi ** Chile's copper output up 0.5% in January ** Brazil seeking joint G20 statement on international taxation by July Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1021.45 0.27 MSCI LatAm 2525.46 -0.26 Brazil Bovespa 129086.29 -0.82 Mexico IPC 55505.11 0.28 Chile IPSA 6444.83 1.58 Argentina MerVal 1033101.47 3.431 Colombia COLCAP 1285.86 0.03 Currencies Latest Daily % change Brazil real 4.9704 0.00 Mexico peso 17.0571 0.19 Chile peso 968.2 0.77 Colombia peso 3929.46 -0.16 Peru sol 3.7753 0.21 Argentina peso 842.3000 -0.06 (interbank) Argentina peso 1010 3.47 (parallel) (Reporting by Shashwat Chauhan in Bengaluru; Editing by Chizu Nomiyama)