* Brazil industrial output lifts real * Mexican peso rebounds from sharp declines overnight * Russian rouble, South African rand firms By Shreyashi Sanyal Nov 4 (Reuters) - Brazil's real jumped on Wednesday after data showed Brazil's industrial output recovering to pre-pandemic levels, while Mexico's peso rebounded against a fading dollar as the U.S. presidential election race became too close to call. The Mexican peso - which had suffered from the Trump administration's hard line on trade in recent years - rose 0.2% as prospects increased of swing states going the way of Democratic candidate Joe Biden. The recovery followed a tumble of as much as 4% overnight. "Now there is talk that Biden is going to win because a lot key swing states want those postal votes counted, resulting in a little bounce in emerging markets," said Chris Shiells, senior emerging markets analyst at Informa Global Markets. "Emerging markets had priced in a Biden victory, with the Mexican peso rallying through the month leading up to the election, it only weakened when it looked like Trump might win but the race is still quite tight." Many emerging market currencies pinballed as investors reverted from their previous view of a Democrat sweep as states keep counting mail-in votes, while President Donald Trump falsely claimed victory and said his lawyers would be taking his case to the U.S. Supreme Court, without specifying what they would claim. The South African rand cut earlier losses to strengthen 0.2% while Russia's rouble firmed 1.3% with rising oil prices adding to the momentum. China's yuan rebounded from early losses after President Xi Jinping flagged strong local consumption trends and said China was moving faster to open up its financial markets. Brazil's currency - the worst performing emerging market currency this year - gained 0.9% against the dollar after industrial production rose a forecast-beating 2.6% in September. The figures remain consistent with other data that have shown rapid recovery in the country's manufacturing and industrial sectors, while Brazil's dominant services sector lagged. The real has falling nearly 30%, with record low interest rates adding to the pressure on the currency. Stocks across emerging markets took their cue from Wall Street as investors priced in more fiscal stimulus for the world's biggest economy with either candidate winning the U.S. vote. "Biden remains a small front-runner and it would appear the Senate will remain Republican... but with regards to fiscal stimulus the market believes that a deal of ~$1 trillion is possible regardless of the ultimate outcome," said Yousef Abbasi, global market strategist at StoneX. The MSCI's EM equities index gained 1.2% and its Latin American counterpart added 1.7%. Key Latin American stock indexes and currencies at 1551 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1134.77 1.24 MSCI LatAm 1891.98 1.69 Brazil Bovespa 97645.35 1.74 Mexico IPC 37421.08 -0.12 Chile IPSA 3503.71 -0.5 Argentina MerVal 47678.12 -0.599 Colombia COLCAP 1166.48 1.31 Currencies Latest Daily % change Brazil real 5.6743 1.51 Mexico peso 21.0890 0.05 Chile peso 758.2 0.09 Colombia peso 3802.17 0.40 Peru sol 3.5948 -0.11 Argentina peso (interbank) 79.0300 -0.13 Argentina peso (parallel) 159 3.77 (Reporting by Shreyashi Sanyal in Bengaluru; Additional reporting by Karin Strohecker in London, Editing by William Maclean)
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