Brazil real gains on inflows, stocks near flat

(Updates to close)

SAO PAULO, May 9 (Reuters) - Brazil's currency gained on Friday on rising investment inflows, while stocks seesawed near the unchanged mark as gains in state-controlled oil company Petrobras were offset by a slump in airlines and retailers.

The Bovespa index .BVSP of the Sao Paulo stock exchange dipped 0.11 percent to 69,645.7 points. World oil prices surged record highs, helping boost Petrobras but the higher fuel costs prompted a selloff in shares of airlines Gol and TAM.

The real BRBY strengthened 0.47 percent to 1.686 per U.S. dollar, buoyed by rising inflows and as exporters sold greenbacks after the recent decline in the Brazilian currency.

Concerns that the government would raise the IOF financial transactions tax on foreign investment in the domestic bond market eased, also helping bolster the real.

"This was the talk of the week," said Renato Schoemberger, a trader at the Alpes brokerage. "But I think the IOF tax is not coming."

Investment flows to Brazil, Latin America's largest economy, are expected to keep growing now that the country won an investment-grade credit rating from Standard & Poor's.

Increased dollar inflows will likely further prop up the real, which is trading near its strongest level in nine years and has proven to be less susceptible to market jitters than the Bovespa.

Concerns that rising inflation at home will prompt Brazil's central bank to further raise interest rates also weighed on the Bovespa.