EMERGING MARKETS-Brazil stocks brush off S&P downgrade; Mexican peso recovers

 (Repeats with no change to headline or text)
    By Bruno Federowski
    SAO PAULO, Jan 12 (Reuters) - Brazil's benchmark index
remained flat on Friday to hew close to its recent record high,
shrugging off a sovereign ratings downgrade by Standard &
Poor's, while Mexico's peso gained on market optimism that key
trade talks will continue. 
    S&P on Thursday cut Brazil's credit rating deeper into junk
territory as doubts grew about a presidential election in
October and a push to trim its costly pension system.

    The move was widely expected after lawmakers last December
pushed a key vote on the unpopular pension bill to February.
    Investors see the pension overhaul, a landmark proposal of
President Michel Temer, as crucial to curtailing public debt and
safeguarding long-term economic growth.
    Some said the downgrade could help Temer pressure lawmakers
into approving the plan to avoid further damage.
    "The government will certainly use this downgrade to
pressure Congress, though it is still highly uncertain whether
it will be successful in doing so," analysts at Coinvalores
brokerage wrote in a client note.
     Equities in real estate and utilities were
among the decliners on Brazil's benchmark Bovespa stock index
 while the real remained flat.
    The Mexican peso strengthened 1.13 percent, helped
by comments from U.S. President Donald Trump published Thursday
that he would be "flexible" on his threat to withdraw from the
North American Free Trade Agreement (NAFTA) because Mexico faces
a presidential election in July. 
    "Trump's statements helped the Mexican currency to cut
losses and reach its best level yet in 2018. Investors now
believe that the NAFTA renegotiation process will continue," CI
Bank said in a report. 
    The next round of negotiations will take place later this
month. 
    Mexico's benchmark IPC index gained slightly,
partially pushed by bank Grupo Financiero Banorte,
whose shares rose 2.74 percent.
        
    Key Latin American stock indexes and currencies at 2050 GMT:
 Stock indexes              Latest        Daily  YTD pct
                                            pct   change
                                         change  
 MSCI Emerging Markets        1,209.71     1.06     3.33
                                                 
 MSCI LatAm                   2,990.31     0.96     4.73
                                                 
 Brazil Bovespa              79,349.12    -0.02     3.86
 Mexico IPC                  49,141.69      0.7    -0.43
 Chile IPSA                   5,733.35     0.27     3.03
 Chile IGPA                  28,829.85     0.26     3.03
 Argentina MerVal            32,762.66     2.13     8.97
 Colombia IGBC               11,623.57    -0.22     2.22
 Venezuela IBC                1,649.36    18.57    30.58
                                                        
 Currencies                     Latest    Daily  YTD pct
                                            pct   change
                                         change  
 Brazil real                    3.2058    -0.03     3.35
 Mexico peso                   19.0590     1.13     3.36
 Chile peso                     602.86     0.40     1.96
 Colombia peso                2,859.55    -0.23     4.28
 Peru sol                        3.216     0.06     0.65
 Argentina peso                18.6800     0.16    -0.43
 (interbank)                                     
 Argentina peso (parallel)       19.49    -0.41    -1.33
                                                 
 
 (Reporting by Bruno Federowski, Flavia Bohone, Daina Beth
Solomon and Miguel Angel Gutierrez; Editing by Bernadette Baum
and Diane Craft)