(Updates prices, adds details on Mexico)
By Bruno Federowski
BRASILIA, Jan 26 (Reuters) - Brazilian markets extended a rally on Friday as traders bet leftist former President Luiz In??cio Lula da Silva would be barred from running in this year's election after an appeals court upheld his conviction for corruption.
The Brazilian real closed up 0.6 percent, a gain of 1.91 percent during the week. The benchmark Bovespa stock index hit an all-time high of 85,530.84, rising 2.21 percent, and making for a gain of more than 5 percent this week.
Lula, who is leading opinion polls and has vowed to undo some of President Michel Temer's austerity efforts, could now be ineligible to stand for election under Brazil's "clean record" law, which bans political candidates whose convictions have been upheld by an appellate court. Lula still has options. An electoral court must make a final ruling on his candidacy and would only do so once he registers.
The court's decision on Wednesday "reduces the risk of unorthodox policymaking and opens up space for candidates that support market-friendly reforms," Magliano brokerage analyst Carlos Soares Rodrigues said.
Blue-chips, including shares of banks and state-controlled oil company Petr??leo Brasileiro SA , lifted Brazil's benchmark index, but miner Vale SA's stock tracked iron ore prices lower.
Mexico's S&P/BMV IPC stock index closed up 0.57 percent at its highest level since the start of September, despite a marked drop in shares of broadcaster Grupo Televisa . After Televisa revealed "some material weaknesses" in its internal controls of financial information, the stock at one point fell by more than 10 percent, before paring those losses to close down 2.1 percent at 76.48 pesos.
The Chilean peso fell nearly 0.5 percent as rising on-warrant copper stocks weighed on prices of the industrial metal. But the Mexican peso rose 0.65 percent, tracking global weakness in the U.S. dollar.
The dollar fell against a basket of currencies on Friday as senior U.S. officials' comments this week in favor of a weak greenback reverberated through currency markets.
After U.S. President Donald Trump said on Thursday he ultimately wanted the dollar to be strong, the currency pared some losses, but it was on track for its biggest monthly drop since March 2016.
Key Latin American stock indexes and currencies at 2220 GMT:Stock indexesdaily %YTD %
change change
LatestMSCI Emerging Markets 1273.07 0.76 9.89MSCI LatAm 3241.47 1.2314.61Brazil Bovespa 85530.84 2.2111.95Mexico IPC 51065.49 0.57 3.47Chile IPSA 5855.67 0.76 5.23Chile IGPA 29413.50 0.67 5.12Argentina MerVal 35126.22-0.0416.83Venezuela IBC 3662.1227.01 189.92
Currencies daily %YTD %
change change
Latest Brazil real 3.1201 0.60 6.19Mexico peso 18.489 0.65 6.54Chile peso 601.40-0.47 2.20Colombia peso 2814-0.85 5.97Peru sol 3.215-0.16 3.58Argentina peso (interbank)19.5625 0.11-4.92 Argentina peso (parallel) 19.93-0.10-3.51 (Reporting by Bruno Federowski; Editing by Lisa Von Ahn and Tom Brown)
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