EMERGING MARKETS-Latam stocks rise on oil, U.S. data

* Libya proposal, U.S. jobless claims seen as positive

* Brazil raises interest rates, 2010 GDP highest since ’86

* Brazil’s Bovespa up 1.2 pct, Mexico IPC 0.95 pct
(Updates to afternoon)

By Michael O’Boyle and Luciana Lopez

MEXICO CITY/SAO PAULO, March 3 (Reuters) – Latin American
stocks advanced on Thursday, buoyed by a drop in oil prices on
a peace proposal for Libya and U.S. data suggesting the
beleaguered job market was improving.

The MSCI Latin American stocks index (.MILA00000PUS: Quote, Profile, Research) rose
1.35 percent and touched its highest since Jan. 27.

“When you had extreme pressure and apprehension about
something, any positive news can cause strong reactions in the
market and that is what you are seeing today,” said Frederick
Searby, a strategist with Deutsche
Bank.

U.S. and Brent crude oil futures briefly fell after
Venezuela said that Libya has accepted a proposal for an
international commission to seek a negotiated solution to its
crisis. For details, see [ID:nN03154291]

The revolt in Libya has rattled markets, with oil prices
jumping on fears of supply disruption. The higher crude prices
stoked fears of inflation and a drag on a global recovery.

Investors still are jumpy. “It’s early to say that the
worst is over,” said Adriano Moreno, a strategist with Futura
Investimentos.

U.S. jobless claims fell last week to their lowest level in
more than 2-1/2 years, the government said, in a possible sign
of strength in the labor market of the region’s major trading
partner. [ID:nOAT004756]

Brazil’s benchmark Bovespa stock index (.BVSP: Quote, Profile, Research) added 1.2
percent, tracking a second straight session of gains.

The country’s central bank raised its benchmark interest
rate to 11.75 percent from 11.25 percent after the close of
markets on Wednesday. The hike was in line with analyst
expectations, although some investors had raised their bets for
a rate of 12 percent in recent sessions. [ID:nN01145534]

Brazil also reported fourth-quarter growth results early on
Thursday, with Finance Minister Guido Mantega saying the
country was moving to a more balanced economy. [ID:nN03246299]

Steelmakers led gains in Sao Paulo, with Gerdau (GGBR4.SA: Quote, Profile, Research)
up 4.78 percent, Usiminas (USIM5.SA: Quote, Profile, Research) 5.01 percent and CSN
(CSNA3.SA: Quote, Profile, Research) 2.36 percent.

Banks also rose, with Itau Unibanco (ITUB4.SA: Quote, Profile, Research), the
country’s largest private-sector bank by assets, up 1.84
percent and Banco do Brasil (BBAS3.SA: Quote, Profile, Research) rising 1.75 percent.

Mexico’s IPC stock index (.MXX: Quote, Profile, Research) moved up 0.95 percent,
extending gains in the previous session.

Chile’s IPSA index (.IPSA: Quote, Profile, Research) advanced 2.16 percent, at a
two-week high after the MACD trend indicator this week signaled
a possible end to the bourse’s slide since December.

Sociedad Quimica y Minera de Chile SA (SQM_pb.SN: Quote, Profile, Research) added
4.71 percent. Chardan raised the company’s American Depositary
Receipts to buy on Thursday.

Shares of Chile’s dominant airline, LAN (LAN.SN: Quote, Profile, Research), rose 2.33
percent after Brazil’s civil aviation authority said it had
approved a planned merger with TAM (TAMM4.SA: Quote, Profile, Research).

Shares of TAM rose 1.55 percent in Sao Paulo.
(Additional reporting by Brad Haynes in Santiago and Rodrigo
Campos in New York; Editing by Kenneth Barry)