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EMERGING MARKETS-Latin American stocks hover near eight-month highs

(Recasts throughout, updates prices) By Susan Mathew Jan 16 (Reuters) - Latin American shares hovered near eight-month highs on Wednesday, with Mexican shares touching the highest in a week, in line with a rise in major world stock indexes.

The MSCI index of Latin American shares climbed 0.3 percent, staying near the high reached on Monday which was the strongest since May, taking heart from U.S. stocks which were bolstered by strong bank earnings.

Mexico's IPC stock index rose 0.5 percent, while Brazil shares reversed losses from earlier in the session as gains in material and consumer stocks helped it close higher.

Argentine equities touched a more than three month high, rising after three days. In Chile, both stocks and the currency rose sharply as copper, its main export, closed 0.8 percent higher on Wednesday.

The Chilean peso finished at a six week high in its longest winning streak ever of fourteen straight sessions of gains.

Among other currencies, Brazil's real and the Argentine peso weakened, while most other currencies firmed against the dollar.

The greenback stayed steady after UK Prime Minister Theresa May's government won a confidence vote, clearing the way for an attempt to forge a consensus among lawmakers on a Brexit divorce agreement.

The real weakened half a percent for a second session after four weeks of gains that were driven by hopes of the new government passing much needed pension reforms.

"The question still remains, however, as to whether the reform will succeed through Parliament. In any case, the road could become bumpy and put the BRL under devaluation pressure every now and then in the coming months," said You-Na Park, an analyst with Commerzbank in a note.

But, she remains optimistic on the real as a majority of the parties agree the reforms are urgently needed, and will pass it eventually, which should be supportive for the currency.

The Mexican peso firmed 0.5 percent to 18.9 per dollar at 2120 GMT.

"It is expected that the (peso) exchange rate will continue to trade steadily around the level of 19.00 pesos per dollar, as market participants wait for new economic indicators that signal the state of global economic activity," analysts at Banco Base said in a note.

The Argentine peso posted its worst day in three weeks.

Key Latin American stock indexes and currencies at 2120 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1010.02 0.49 MSCI LatAm 2836.50 0.33 Brazil Bovespa 94393.07 0.36 Mexico IPC 43804.12 0.46 Chile IPSA 5419.07 0.84 Argentina MerVal 34048.02 1.45 Colombia IGBC 11656.46 -0.06 Currencies Latest Daily % change Brazil real 3.7361 -0.07 Mexico peso 18.9082 0.42 Chile peso 668.55 0.96 Colombia peso 3115.6 0.76 Peru sol 3.331 0.06 Argentina peso (interbank) 37.4800 -0.91 (Reporting by Susan Mathew in Bengaluru; editing by Chris Reese)