EMERGING MARKETS-Brazil rally boosts stocks, Peruvian sol drops on weak economy

(Updated at 1556 GMT) * Stocks up 0.2%, FX rise 0.1% * Peruvian sol drops after economy contracts * Israel's Q3 GDP robust despite estimate miss By Siddarth S Nov 16 (Reuters) - Latin American stocks advanced on Thursday, boosted by heavyweight Brazilian shares, while the Peruvian sol dropped 1% a day after the copper-producing nation's economy contracted for a fifth consecutive month in September. MSCI's gauge for Latin American currencies rose 0.1% against the dollar, while regional equities rose 0.2% by 1556 GMT. Latin American assets have been on a good run this week after cooling inflation data fueled bets that the U.S. Federal Reserve was done hiking interest rates and markets have started pricing in rate cuts for next year. "If expectations or concerns about further Fed (rate) hikes settled down, as you see some stability in the Treasury market, that's positive for sentiment in Latin America and we've certainly seen that more recently," said David Rees, senior emerging markets economist at Schroders. "At the moment our official number is that the Fed would start cutting rates around the middle of the year," Rees added. Brazil's Bovespa stock index rose 0.7%, while the real gained 0.1%. Shares of Americanas jumped 8.8% after the Brazilian retailer disclosed revised financial results for 2021 and figures for 2022 after a multibillion-dollar accounting scandal was uncovered this year, leading it to file for bankruptcy. The Peruvian sol dropped 1.0% after data on Wednesday showed its economy contracted for a fifth consecutive month in September, landing well below forecasts. The mining-dependent South American economy has stumbled this year in part due to bad weather linked to the El Nino weather phenomenon and social strife. The Colombian peso also fell nearly 1% after the oil exporting nation's economy shrank 0.3% in the third quarter from the year-earlier period. Further adding pressure to the peso, Colombia's President Gustavo Petro said on Wednesday the country should not maintain its so-called fiscal rule in order to boost public investment and promote economic recovery, though he conceded any such decision must be made by Congress. China, a major market for Latam countries, saw its new home prices fall for the fourth straight month suggesting a broader weakening in the sector that could drag on the country's overall recovery. "(China's) domestic outlook is still pretty fragile," Rees added. Global investors expect a large amount of financial pain out of Argentina no matter who voters pick on Sunday as their next president, as a much-needed fiscal adjustment will likely trigger even more inflation. Israel's economy grew solidly in the third quarter, although less than estimated, data showed, ahead of an expected weak end to the year due to Israel's war with Palestinian militant group Hamas. The shekel strengthened 1.1% against the dollar. Key Latin American stock indexes and currencies at 1556 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 982.85 -0.07 MSCI LatAm 2451.63 0.16 Brazil Bovespa 124037.36 0.71 Mexico IPC 52572.54 -0.42 Chile IPSA 5706.08 -1.2 Argentina MerVal 615497.38 -2.203 Colombia COLCAP 1107.02 -0.28 Currencies Latest Daily % change Brazil real 4.8580 0.05 Mexico peso 17.2710 0.14 Chile peso 879.4 0.85 Colombia peso 4074.75 -0.93 Peru sol 3.8239 -1.33 Argentina peso 353.4500 -0.13 (interbank) Argentina peso 930 4.30 (parallel) (Reporting by Siddarth S in Bengaluru; Editing by Richard Chang)