EMERGING MARKETS-Latam stocks rise to three-month high

* European banks, U.S. factory data provide impetus

* Brazil stocks notch 11 session of gains

* Bovespa rises 1.48 pct, Mexico's IPC up 1.57 pct (Recasts, adds comments and closing prices)

SAO PAULO/MEXICO CITY, Aug 2 (Reuters) - Latin American stocks closed at a three-month high on Monday as European banking results and U.S. factory data bolstered confidence in the global economic recovery.

Commodity prices rose, lifting Latin American miners like Brazil's Vale and Mexico's Grupo Mexico.

Expectations for strong earnings from Brazilian corporations boosted share prices in Sao Paulo where the Bovespa index closed higher for an 11th straight session and returned to gains after several months in the red this year.

The MSCI Latin American stocks index .MILA00000PUS closed up 2.08 percent at its highest since April 29, 2010.

The index closed out July with its best monthly performance in more than a year, gaining in 10 of the last 11 sessions.

"Not a bad start to August," said Gerardo Copca, an analyst at consultancy MetAnalisis in Mexico City.

Two major European banks beat earnings estimates and data showed U.S. manufacturing growth slowed less than expected in July and marked its 12th straight month of expansion.

"This data shows that the economy is not slowing that much and demand could hold up," Copca said. "The bank earnings give confidence in the European banks in general. People had been contemplating a much more difficult future."

The Thomson Reuters Latin America total return index .TRXFLDLATU rose 1.72 percent for a third straight day of gains.

Brazil's Bovespa index .BVSP climbed 1.48 percent. The index has not seen 11 straight session of gains since August 2003.

Shares in mining giant Vale (VALE5.SA), the world's largest producer of iron ore, rose 3.35 percent. The company beat estimates with earnings last week.

"We reiterate our Top Pick rating on Vale due to a 44 percent upside potential to our target price and due to our expectations of improving steel demand from the fourth quarter onwards," Deutsche Bank analysts wrote in a report.

Deutsche Bank has a target price of $40 on Vale's New York-traded shares (VALE.N), which rose 1.27 percent to 29.07.

Also supporting Vale, the miner will become the biggest weighted stock in the Bovespa, displacing Petrobras, later this year. For September through December, Vale will have a weight of 10.84 percent compared to a 9.951 weight for Petrobras.

Real estate developer Gafisa (GFSA3.SA) rose 3.41 percent ahead of its second-quarter report, due Tuesday, where its seen posting a 58 percent jump in net income. [ID:nN02213531]

Builders are expected to post a surge in profits, boosted by new building and ample consumer credit. Cyrela (CYRE3.SA) added 2.9 percent.

State-controlled energy company Petrobras (PETR4.SA) rose 2.86 percent, helped by a jump in crude oil CLc1 as the dollar weakened.

Mexico's IPC stock index .MXX rose 1.24 percent, snapping a four-day slide.

"Previous losses resulted in some attractive share prices and this is reflected in the trading volume," said Fernando Gonzalez, head of consultancy Fast Profit in Mexico.

Shares of Latin American telecom giant America Movil (AMXL.MX) advanced 2.49 percent, and Walmex (WALMEXV.MX), Mexico's leading retailer, gained 0.99 percent.

Shares of mining giant Grupo Mexico (GMEXICOB.MX) gained 1.81 percent. Banamex pointed to optimism due to the merger of its mining units and plans to spend $3.8 billion during the next five years to boost output at the Cananea mine. [ID:nN29168615]

Chile's blue chip IPSA index .IPSA advanced 1.25 percent and closed at a new all-time high. Chilean stocks have been posting record highs since June.

Shares of the country's largest bank, Santander Chile STG.SN, jumped 4.62 percent while retailer Cencosud CEN.SN added 3.24 percent. (Reporting by Michael O'Boyle and Lizbeth Salazar in Mexico City, Luciana Lopez and Guillermo Parra-Bernal in Sao Paulo; Editing by Kenneth Barry)