* Chile's peso set for third straight day of gains * MSCI Latam stock index hits highest since March 9 * Peru's sol extends gains after appointment of interim leader By Shriya Ramakrishnan Nov 18 (Reuters) - Latin American stocks jumped to the highest in more than eight months on Wednesday, driven by positive news on the development of a COVID-19 vaccine, while Chile's peso gained as economic growth data pointed to recovery. MSCI's index of Latin American stocks rose up to 1% to its highest level since March 9, and its currencies counterpart climbed 0.9% after drugmaker Pfizer said its COVID-19 vaccine was 95% effective and it would apply for emergency U.S. authorization within days. Chile's peso was the best performer among regional currencies, strengthening 0.8% against the dollar, while stocks rose about half a percent. The currency was supported by buoyant copper prices. Chile is the world's top producer of the commodity, seen as a bellwether of global economic health. Data released earlier in the day showed Chile's third quarter gross domestic product contracted compared with a year earlier, but rose 5.2% versus the second quarter, showing signs of a slow recovery following the peak of the coronavirus outbreak in May and June. "We think output will return to its pre-crisis level quicker (in Chile) than elsewhere in the region, supported by loose fiscal policy and high copper prices," Nikhil Sanghani, Latin America economist at Capital Economics wrote in a note. "While there is still uncertainty about the speed of access and distribution, Chile will probably benefit from a vaccine quicker than others in the region as it has already made significant purchase agreements." Brazil's real advanced 0.6%, putting it on course for a third straight day of gains, while Mexico's peso climbed 0.4% as strength in global crude prices benefited the region's net exporter. Sentiment towards Brazil's currency has improved after the government raised its growth forecast for the year and said it will approve all necessary reforms to bring public finances back to health and restore credibility in Latin America's largest economy. Peru's sol extended gains a day after recording its largest daily jump in more than seven months, following the appointment of Francisco Sagasti as interim president of the Andean nation. "Sagasti's track record as a centrist and a technocrat, as well as his strong support in Congress, bodes well for containing the political turmoil in the near-term," analysts at Credit Suisse said in a note. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1208.58 0.6 MSCI LatAm 2188.28 0.43 Brazil Bovespa 106650.15 -0.56 Mexico IPC - - Chile IPSA 4075.11 0.53 Argentina MerVal 51978.84 0.13 Colombia COLCAP 1232.82 0.17 Currencies Latest Daily % change Brazil real 5.3010 0.60 Mexico peso 20.2300 0.38 Chile peso 756.7 0.83 Colombia peso 3654.88 -0.34 Peru sol 3.5828 0.53 Argentina peso (interbank) 80.1200 -0.10 (Reporting by Shriya Ramakrishnan in Bengaluru; editing by Barbara Lewis)
Our Standards: The Thomson Reuters Trust Principles.