EMERGING MARKETS-Peruvian stocks gain, Brazil's real weakens with domestic developments in focus

By Niket Nishant and Twesha Dikshit

Dec 22 (Reuters) - Peru's stock benchmark gained on Monday, buoyed by record highs in the prices of gold and copper that helped it defy weakness across the region while investors continued to monitor geopolitical tensions and domestic updates ahead of Brazil's elections next year.

The Lima stock exchange .MXNUAMPESCPGPE rose 1.1% to a record high, on track for its fourth straight day of gains. Copper and gold are two of Peru's top exports.

The moves underscore how commodity demand, especially for safe-haven gold, can cushion local assets even as regional weakness persists.

"There are nerves about escalating tensions between the US and Venezuela and that’s pushing many towards the perceived safe havens of precious metals, especially with the dollar continuing to edge lower after last week’s relatively benign inflation reading,” said Danni Hewson, head of financial analysis at AJ Bell.

BRAZILIAN ASSETS UNDER PRESSURE

Senator Flavio Bolsonaro, the eldest son of former President Jair Bolsonaro, told Reuters he plans a presidential campaign next year to moderate the family legacy while delivering smaller government, tax cuts and privatizations.

The real BRL= dropped 0.7%, set for a fifth consecutive days of losses.

Brazil's Bovespa index .BVSP fell 0.2%, unable to break out of the narrow range it has been trading in since the central bank signaled last week that it may hold interest rates for a prolonged period to ensure inflation converges to its target.

The country's oil regulator authorized state-owned Petrobras PETR4.SA to start production at a unit in the Santos Basin. Shares of the company climbed 1%.

In Mexico, stocks .MXX climbed 0.9% after two days of gains, while the peso MXN= rose 0.2%.

Data on Monday showed the economy expanded in October, rebounding from a contraction the previous month, but prospects remain challenging.

Mexico's year-on-year inflation is expected to have moderated during the first half of December, with the core rate remaining above the official target, according to a Reuters poll of analysts.

Argentine stocks .MERV rose 0.4%, clawing back the losses in the last session. The peso ARS=RASL was 0.1% weaker. Domestic data showed the country's economic activity grew 3.2% in October compared to the same month last year.

Overall, the MSCI index that tracks Latin American equities .MILA00000PUS dropped 0.3%, while a gauge of currencies .MILA00000CUS was muted,

Regional assets, however, remain attractive compared to their U.S. peers, especially due to more benign valuations and expectations of a weakening in the U.S. dollar.

Interest rate cuts by the Federal Reserve generally reduce the cost of capital for emerging market companies and boost the appeal of local currencies, as investors search for high-yielding alternatives to the dollar.

Key Latin American stock indexes and currencies at 19:35 GMT: