EMERGING MARKETS-LatAm stocks up on Brazil, U.S. factory activity

* Brazil's Bovespa gains first day in five, led by Gol
* Latin American stocks rise on U.S. manufacturing data

By Danielle Assalve and Gabriel Stargardter
SAO PAULO/MEXICO CITY Oct 1 (Reuters) - Latin American
stocks rose on Monday after rising sentiment among Brazilian
manufacturers backed bets of an economic rebound in the region's
top economy and a surprising expansion in factory activity in
the United States boded well for Mexico.
The MSCI Latin American stock index added
0.63 percent to 3,697.77, the third gain in the last four
sessions.
A survey of Brazil's manufacturing sector recorded its best
month since March on strong output and a slower pace of layoffs,
as the index rose to just short of the 50 mark that divides
contraction and expansion.
Meanwhile, an index of U.S. factory activity pointed to
expansion for the first time since May, bolstering hopes for a
stronger economy in one of Mexico's most important trading
partners.
"We are witnessing a recovery today in Brazil because of the
losses of recent days that some of us are judging overdone,"
said Luiz Roberto Monteiro, a stock trader with São Paulo-based
brokerage Renascença Corretora.
Expectations of support from central banks, including the
Federal Reserve and the European Central Bank, should keep
pushing investors toward riskier assets, traders said.
Brazil's benchmark Bovespa stock index rose 0.67
percent to 59,570.80, its first gain in five sessions. The index
has fallen nearly 4 percent since Sept. 24.
Brazilian low-cost airline Gol drove gains, up
10.63 percent, following its purchase order for 60 Boeing
737 MAX planes, the largest-ever order for jets in Latin
America, set for delivery in 2018.
Brazilian banks rebounded from a recent slump. Banks fell
sharply last week amid concerns that their profits would fall as
the government pushed for lower bank spreads, the difference
between what they pay in interest to depositors and what they
charge in interest on loans.
Shares of the country's two largest private-sector banks
Itau and Bradesco, also gained, with Itau
up 1.57 percent, and Bradesco up 1.84 percent.
Preferred shares of state-run oil company Petrobras
rose 0.63 percent, even after the company reported
that August domestic output fell for the fifth straight month
because of maintenance shutdowns of offshore facilities.
Mexico's IPC index rose 0.63 percent to 41,124.56,
the fourth straight day of gains. Banking group Banorte
led the charge, rising 3.78 percent in its largest
single-day gain since early August.
"The bourse is above 41,000 points, driven firmly by the
performance of the Dow Jones (industrial average) and the
manufacturing figures from the United States," said Luis Anaya,
a trader at the Casa de Cambio Unica brokerage in Mexico City.
Mexico sends nearly 80 percent of its exports to its
northern neighbor and its factories tend to closely track
activity in the United States.
An index of manufacturing activity in Mexico slowed for a
third month in a row in September, but still pointed to further
expansion ahead.
Chile's blue-chip IPSA index was flat at 4,232.08.

Latin America's key stock indexes at 2211 GMT:

Stock indexes daily % year-to-
Latest change ate %
change
MSCI LatAm 3,697.77 0.63 2.65

Brazil Bovespa 59,570.80 0.67 4.96

Mexico IPC 41,124.56 0.63 10.92

Chile IPSA 4,232.08 0.04 1.31

Chile IGPA 20,564.54 0.06 2.16

Argentina MerVal 2,458.46 0.27 -0.17

Colombia IGBC 14,101.17 0.32 11.33

Peru IGRA 21,674.79 -0.28 11.31

Venezuela IBC 316,775.63 2.82 170.66