EMERGING MARKETS-Commodity-linked Latam stocks rise, FX slips after US-China tariff deal

By Nikhil Sharma and Johann M Cherian

May 12 (Reuters) - Most resources-linked Latin American equities advanced on Monday, while currencies declined against a stronger dollar after the United States and China struck a deal to lower their steep tariffs on each other.

Following weekend talks in Geneva, the U.S. agreed to cut extra tariffs on Chinese imports to 30% from 145%, while China would cut duties on U.S. imports to 10% from 125%. The new measures are effective for 90 days.

Deals come as a relief for global investors who have been on the edge ever since Trump announced his sweeping universal levies on key trading partners, creating an environment of high volatility.

Brazil's Bovespa index .BVSP edged up 0.2%, Argentina's Merval index .MERV added 2.2% and Chile's benchmark index .SPIPSA added 0.7%.

Stocks in the region have outperformed the broader MSCI gauge for emerging market equities .MSCIEF so far this year.

Latin American economies have faced among the smallest of Washington's tariffs, and investors have looked for bargains outside the United States as they priced in the likelihood of a U.S. recession.

However, expectations of a global slowdown in the event of a prolonged U.S.-China rift had weighed on commodity prices - a top export from the region.

On Monday, top energy companies in the region including Brazil's Petrobras PETR4.SA jumped 3.2%, Argentina's YPF YPFDm.BA gained 4.1% and Colombia's Ecopetrol ECO.CN climbed 1.2%, tracking higher crude prices. O/R

Miners including Brazil's Vale VALE3.SA surged 3.1%, Mexico's Grupo Mexico SAB de CV GMEXICOB.MX advanced 1.3% and U.S.-listed shares of SQM SQM.N rose 3.7%, tracking higher industrial metal prices. MET/L

"Comparatively, we are doing reactively better than other regions," said Andres Abadia, chief Latam economist at Pantheon Macroeconomics.

"But sentiment with this new announcement is improving and that also implies that Latam markets will be in a better shape or will be under less stress with these announcements of a pause of tariffs towards China."

MSCI's Latam currencies index .MILA00000CUS slipped 0.6% against the U.S. dollar, which jumped to a one-month high, up 1.2%. The dollar index was down 7.4% for the year so far.

In Mexico, the peso MXN= depreciated 1% and local stocks .MXX lost 0.3%. Data showed industrial output fell 0.9% in March from February, even as the government reiterated their expectations for the economy this year.

The country's central bank is expected to cut its benchmark interest rate later this week.

Brazil's real BRL= weakened 0.6%. Focus was on President Luiz Inacio Lula da Silva's state visit to Beijing, with Brazil's trade and investment promotion agency announcing around 27 billion reais ($4.78 billion) of Chinese investment into the country.

China is also expected to host officials from other Latin American and Caribbean economies, including Colombia and Chile.

Meanwhile, a survey showed economists believe the Brazilian central bank's aggressive monetary tightening cycle has come to an end.

Chile's peso CLP= dipped 0.5%. A survey showed analysts expect the central bank to leave benchmark interest rates unchanged in June.

Elsewhere, India's benchmarks .NSEI and .BSESN registered their biggest one-day rise in more than four years, while Pakistani dollar bonds advanced and the local bourse .KSE saw its steepest one-day jump since 1998 after the two nuclear powers agreed to ceasefire over the weekend.