* Emerging stocks post strongest monthly rally in 14 years

* Mexico shuts down to avoid spread of flu virus

* Colombian cenbank cuts rate by 100 bps, economy stalls

* Chile's industrial output falls for sixth straight month

*

By Walter Brandimarte

NEW YORK, April 30 (Reuters) - Emerging equity markets
dropped on Thursday but staged their strongest monthly rally in
more than 14 years in April as positive U.S. economic data
raised hopes that the recession is abating.

The MSCI stock index for emerging markets .MSCIEF soared
16.24 percent in April, its best performance since Dec. 1994,
following sizable gains of 14.15 percent in March.

The Latin American portion of the MSCI indicator
.MILA00000PUS jumped 15.78 percent in April after gains of
10.64 percent in March.

"The market is euphoric, it reminds me of the last year's
highs," said Luiz Roberto Monteiro, investment analyst at Souza
Barros brokerage in Sao Paulo, warning against a possible
"bubble" in stock prices.

But Latin American stocks gave back part of their recent
gains, as Wall Street retreated on anxiety related to a
bankruptcy filing by Chrysler LLC.

The MSCI stock index for Latin America closed 0.28 percent
lower, with Mexico's IPC index .MXX declining 0.82 percent.

Mexican financial markets have been seesawing during the
past few days as economists try to gauge the economic impact of
a deadly flu outbreak in the country. On Thursday the
government ordered the shutdown of government offices and
private businesses not crucial to the economy, in an attempt to
avoid further spreading of the virus. [ID:nSP370581]

Chile's blue-chip stock index IPSA .IPSA dropped 1.61
percent mainly on profit taking, analysts said, as the
country's poor industrial production data, released earlier in
the session, came in mostly in line with estimates.

Chilean industrial production fell 7.1 percent in March
compared with the same month a year earlier, following a 11.5
percent decline in February. [ID:nN30303472]

In Brazil, however, the Bovespa stock index .BVSP managed
to close with modest gains of 0.13 percent, while in Argentina
the MerVal rose 0.36 percent.

Latin American currencies posted a mixed performance on
Thursday. Currencies closed lower in Brazil, Mexico and
Colombia, but higher in Argentina, Chile and Peru.

The Brazilian real (BRBY: Quote, Profile, Research) weakened 0.5 percent to 2.182 per
dollar, but still ended the month with gains of about 2
percent. Analysts said the real seems to be stabilizing around
2.2 per greenback.

The Mexican peso MXN=MEX01 lost 1.72 percent to 13.8435
per dollar at the central bank's final reference, hurt by fears
that the flu outbreak will further hurt the country's battered
economy.

The Colombian peso COP=RR edged 0.13 percent lower to
2,294.95 per dollar, with investors cautious before a central
bank's monetary policy decision.

After the foreign exchange market closed, the Colombian
central bank cut interest rates by 100 basis points to 6.0
percent, its fifth cut in as many months. [ID:nN30536739]

After the decision, central bank governor Jose Dario Uribe
said the bank is revising its growth forecast for the Colombian
economy to a "rate not very different from zero." The bank
previously expected the economy to expand between 1 percent and
3 percent this year.
(Additional reporting by Alberto Alerigi Jr in Sao Paulo)