* Chile"s peso set for third straight day of gains * MSCI Latam stock index hits highest since March 9 * Peru"s sol extends gains after appointment of interim leader (Adds details, updates prices) By Shriya Ramakrishnan and Ambar Warrick Nov 18 (Reuters) - Latin American stocks jumped to their highest in more than eight months on Wednesday, driven by positive news on the development of a COVID-19 vaccine, while Chile"s peso gained on encouraging economic growth data. MSCI"s index of Latin American stocks rose as much as 1% to its highest level since March 9, and the currencies index climbed 0.9% after drugmaker Pfizer said its COVID-19 vaccine was 95% effective and it would apply for emergency U.S. authorization within days. Chile"s peso was among the top regional gainers, strengthening 0.8% against the dollar on support from higher prices for copper, the country"s top export. Data released earlier in the day showed Chile"s third quarter gross domestic product contracted compared with a year earlier, but rose 5.2% versus the second quarter, showing signs of a slow recovery following the peak of the novel coronavirus pandemic. "We think output will return to its pre-crisis level quicker (in Chile) than elsewhere in the region, supported by loose fiscal policy and high copper prices," Nikhil Sanghani, Latin America economist at Capital Economics wrote in a note. "Chile will probably benefit from a vaccine quicker than others in the region as it has already made significant purchase agreements." Optimism over a vaccine has benefited regional risk assets over the past week, with Latam stocks outperforming their emerging markets peers on hopes of a relatively quicker economic recovery. The MSCI"s index of emerging market stocks rose 0.5% for the day. Peru"s sol extended gains a day after recording its largest daily jump in more than seven months, following the appointment of Francisco Sagasti as interim president. "Sagasti"s track record as a centrist and a technocrat, as well as his strong support in Congress, bodes well for containing the political turmoil in the near-term," analysts at Credit Suisse said in a note. The Peruvian government also enacted a reform to citizen pension withdrawals in order to ease the economic impact of the virus. Brazil"s real advanced 0.1%, putting it on course for a third straight day of gains. The central bank said it will intervene to protect the real if the foreign exchange market is unable to absorb the "large" outflow of reais expected by the end of the year as local banks unwind their so-called overhedge position. Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1207.56 0.51 MSCI LatAm 2189.24 0.48 Brazil Bovespa 107024.08 -0.21 Mexico IPC 42396.40 1.07 Chile IPSA 4109.19 1.37 Argentina MerVal 51755.02 -0.301 Colombia COLCAP 1238.24 0.61 Currencies Latest Daily % change Brazil real 5.3260 0.12 Mexico peso 20.2396 0.33 Chile peso 757.3 0.75 Colombia peso 3641.5 0.03 Peru sol 3.5697 0.90 Argentina peso 80.1500 -0.14 (interbank) (Reporting by Shriya Ramakrishnan in Bengaluru; editing by Barbara Lewis and Grant McCool)