EMERGING MARKETS-Latam FX steady, but Brazil's real, Chilean peso lag on virus woes

* Brazil's real flat on concerns over local strain * Chilean economic activity falls in January * Mexican, Colombian pesos gain on oil prices (Adds details, updates prices) By Susan Mathew and Ambar Warrick March 1 (Reuters) - Most Latin American currencies firmed on Monday, in line with broader emerging markets, as yields on U.S. Treasuries calmed after a sharp climb last week while Brazil's real lagged on concerns over a domestic coronavirus strain. Higher oil prices buoyed currencies of crude exporters Mexico and Colombia, which rose 1.1% and 0.7% respectively, recovering from losses of more than 2% last week. Risk assets were hammered last week when U.S. Treasury yields trended higher. But as yields stabilized on Monday, emerging market assets regained some traction. "MXN bonds were the most sensitive during the 2013 & 2016 yields spikes and will likely be hit relatively more as U.S. yields rise," said strategists at TD securities. "Singapore, Polish and South African government bonds are likely to come under strong pressure should UST yields push higher," they said, while Hungarian, Malaysian and Indian bond markets are expected to be least impacted. Optimism on Monday also stemmed from the U.S. House passing President Joe Biden's $1.9 trillion stimulus package, sending it to the Senate, while the rollout of Johnson & Johnson's single-dose COVID-19 vaccine also added to the cheer over an economic recovery. Brazil's real lagged its peers after media reports suggested a variant of COVID-19 that originated in the country is found to evade natural immunity. The currency has fallen behind its peers in recent weeks as concerns grow over stretched fiscal spending, as well the government adopting populist approaches to spending. Still, data painted an improving picture for Latin America's largest economy. The pace of expansion in its manufacturing sector picked up again in February after three months of deceleration, accompanied by a bigger-than-expected trade surplus in the month. Chile's peso also lagged its regional peers after data showed the country's economic activity fell 3.1% in January, due to a resurgence in regional infections. In stock trading, Brazilian insurer and hospital operator Hapvida Participacoes e Investimentos jumped 6.7% after it revealed terms of its acquisition by competitor Notre Dame Intermedica Participacoes, a deal that would create the country's largest hospital chain. Intermedica shares were up 5.4%. Shares of oil firm Petrobras rose after it hiked diesel and gasoline prices. The company's disagreement over fuel pricing saw its Chief executive ousted last week by Brazilian President Jair Bolsonaro, causing its shares to plunge 22%. It has since recovered about 5% of the losses. The MSCI's index of Latam stocks rose 1.7% after marking its worst week in four months. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1362.80 1.76 MSCI LatAm 2250.68 1.65 Brazil Bovespa 112107.97 1.88 Mexico IPC 44884.27 0.65 Chile IPSA 4630.73 1.25 Argentina MerVal 49103.25 1.385 Colombia COLCAP 1355.19 -0.32 Currencies Latest Daily % change Brazil real 5.5979 0.05 Mexico peso 20.6279 1.07 Chile peso 723.3 0.08 Colombia peso 3618.35 0.72 Peru sol 3.6557 -0.22 Argentina peso 90.0800 -0.28 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Kirsten Donovan and Dan Grebler)