EMERGING MARKETS-Latam stocks, FX fall as weaker commodity prices weigh

By Ragini Mathur

Oct 29 (Reuters) - Most Latin American stocks and currencies fell on Thursday as a souring global mood towards risk and weaker commodity prices pressured the region's assets, while investors assessed economic data across key markets.

MSCI's indexes tracking Latin American equities .MILA00000PUS and currencies .MILA00000CUS were down 0.9% and 0.3%, respectively, building on steep losses earlier this week after Brazilian President Luiz Inacio Lula da Silva's re-election.

Markets had largely expected his right-wing opponent, Senator Flavio Bolsonaro, to prevail, betting his administration would pursue stronger fiscal consolidation.

Those expectations had boosted Brazilian assets ahead of the vote, but the gains unwound sharply after Lula's victory.

Bolsonaro declared himself Brazil's rightful leader on Wednesday after arriving in the US, alleging he was the victim of an electoral coup.

Data showed on the day that Brazilian household debt as a share of income accumulated over the previous 12 months climbed to a record 50.1% in August, while income committed to debt servicing reached an all-time high of 29.0%.

The figures underscore mounting strain on household finances despite two debt-relief programs launched by Lula's government, which used Treasury-backed guarantees to support debt refinancing.

Brazilian stocks .BVSP fell 0.9%, while the real weakened 0.7%, extending losses since the election result to nearly 17% and 8%, respectively.

"We think that it's a bit excessive in terms of correction. The question is whether policy remains more fiscally disciplined," said Luca Bindelli, head of investment strategy at Lombard Odier.

"There are a couple of reasons to be more reassured. One is that the election is over, so that reduces the incentive for pre-election fiscal support or discussions. And then Congress will be more right-leaning and will itself act as more of a fiscal constraint."

Brazil Treasury Secretary Daniel Leal said on the day that the debt market has become more stable following aggressive bond buyback operations launched after Lula's re-election triggered a sharp increase in the risk premium demanded by investors.

A cooling in enthusiasm around the AI trade also dampened global risk sentiment.

Elsewhere, Chile's unemployment rate rose to its highest level in more than five years in the quarter through September.

Chilean stocks .MMXIPSAGC dropped 1%, while the peso slipped 0.5% as copper prices fell. Investors remained cautious over demand from the artificial intelligence sector and high US inventories of the metal, Chile's main export. MET/L

In Peru, where gold is a key export, the sol weakened 0.3% as bullion prices fell 1%. Data showing elevated US inflation reinforced expectations that the Federal Reserve could raise interest rates later this year, reducing the appeal of non-yielding gold. GOL/

Commodity-focused Latin American markets were broadly under pressure on Thursday, with oil prices also falling. GOL/

Mexico's peso fell 0.9%, while stocks .MXX were up 0.5%. Investors awaited signs of progress in trade talks with the US after President Claudia Sheinbaum said on Wednesday that both sides were assessing whether an agreement could be reached before the US midterm elections.

Key Latin American stock indexes and currencies: