Updates with afternoon trading levels

By Johann M Cherian, Avinash P and Purvi Agarwal

May 14 (Reuters) - Latin American currencies and stocks were mixed on Thursday as investors tracked developments from the U.S.-China summit, while also assessing Venezuela's decision to launch a sovereign debt restructuring nearly a decade since its default.

Global attention was on the two-day meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping in Beijing that has shown initial signs of progress. Investors were scouring for any clues that China could convince Iran to sign a peace deal with Washington after weeks of an uncertain ceasefire.

Both the economic super powers have been vying for a greater influence in Latin America, given its significance as a major commodities exporter.

Brazil's real BRL= was up 0.4% at 4.99 per dollar, after the currency logged its steepest one-day fall since early December on Wednesday, while the local stock index .BVSP added 0.8%.

Brazilian assets were rattled in the previous session after a report alleged ties between Senator Flavio Bolsonaro and a scandal-hit banker, with some speculating it could tip the balance of a close presidential race.

Allies of the senator scrambled to play down ties to a jailed banker on Thursday, and tried to minimize its importance for the presidential election.

"We believe that the dynamics underlying the election could shift significantly from this point onward, particularly given the public sensitivity toward corruption issues and the growing prominence of the Banco Master case in Brazil's media coverage," said a group of FX and rates strategists at Macquarie led by Thierry Wizman.

Brazil has faced high interest rates and deteriorating public finances under the current administration, which prompted analysts to anticipate a more market-friendly government.

Meanwhile, copper producer Chile's peso CLP= slipped 0.7% to hit a three-week low, pressured by declining prices of the red metal, while Mexico's peso MXN= dipped 0.3%.

Other currencies such as Peru's sol PEN= was flat ahead of a monetary policy decision later in the day, as was Colombia's peso COP=.

VENEZUELA DEBT RESTRUCTURING HOPES RISE

Venezuela's international bonds rallied after the country launched what is widely expected to be one of the biggest and most complex sovereign debt restructuring exercises.

The country's interim central bank president Luis Perez said restructuring its sovereign debt and that of state oil firm PDVSA would bring the country "out of the shadows" of the global financial system.

The U.S. issued a sanctions waiver earlier this month, called the general license (GL) 58 that opened the door for the restructuring.

"They need to retain a credible financial advisor in the sovereign advisory space. They already have legal counsel but they likely need to bring on more resources," said AJ Mediratta, partner at Greylock Capital Management.

Its 2027 922646AS3=1M and defaulted 2022 maturities USP17625AC1=1M gained over 1.5 cents on the dollar each.

In Colombia, the country's financial watchdog announced investigations into private pension funds for failing to transfer resources to state-run pension administrator Colpensiones as directed by a top administrative court's decision last month.

Local stocks .COLCAP outperformed peers, up 3% and on track to log their biggest one-day jump in more than a month, with oil company Ecopetrol ECO.CN gaining 2.9%.

Mexican stocks .MXX fell 1.6%, the most among peers.

Elsewhere, Iraqi officials approached the International Monetary Fund about securing financial assistance as a result of the Iran war, Reuters reported.

Key Latin American stock indexes and currencies:

Latin American market prices from Reuters
Equities	Latest	Daily % change
MSCI Emerging Markets .MSCIEF	1715.79	0.62
MSCI LatAm .MILA00000PUS	3098.72	-0.66
Brazil Bovespa .BVSP	178518.59	0.8
Mexico IPC .MXX	69061.24	-1.6
Chile IPSA .SPIPSA	10456.73	0.59
Argentina Merval .MERV	2756736.58	0.671
Colombia COLCAP .COLCAP	2134.86	2.96
Currencies	Latest	Daily % change
Brazil real BRL=	4.9881	0.44
Mexico peso MXN=	17.217	-0.29
Chile peso CLP=	893.84	-0.71
Colombia peso COP=	3777.8	0.05
Peru sol PEN=	3.421	-0.13
Argentina peso (interbank) ARS=RASL	1390.5	0.14
Argentina peso (parallel) ARSB=	1400	1.43