* Real also pressured by anti-government protests * Brazilian stocks slump over 1% * Colombian peso extends gains post-rate hike By Ambar Warrick Oct 4 (Reuters) - Brazil"s real led losses across Latin American currencies on Monday as regional units tracked a broader decline in emerging markets on concerns over the Chinese economy and rising Treasury yields. The real sank 0.8% to 5.4137 against the dollar, with political uncertainty also coming into play after anti-government demonstrations broke out in major capitals over the weekend. Amid growing discontent with President Jair Bolsonaro"s administration, a potential change of government next year could also result in sudden changes to fiscal policy. The government is already struggling with stretched fiscal spending due to the COVID-19 pandemic. "The window to pass quality reforms that would contribute to increased productivity and longer-term growth is closing, leaving the government scrambling to find ways to finance its re-election campaign," Wilson Ferrarezi, economist, Brazil Research at TS Lombard, wrote in a note. A rise in U.S. Treasury yields weighed on most emerging market assets, as the gap between risky and risk-free debt narrowed. Mexico"s peso sank 0.6% despite a slight uptick in consumer confidence, while Chile"s peso fell 0.3%. The U.S. dollar benefited from safe haven demand as reports said China"s second-largest property developer, Evergrande , was considering a $5 billion asset sale to fund its debt repayment. Evergrande"s debt uncertainty, coupled with a slew of weak Chinese economic data last month, has brewed concerns about slowing economic growth in China, which in turn could spill over to several emerging economies that are exposed to the country. Latin America, for instance, is a major exporter of raw materials to China, and is likely to be impacted by a slowdown. Colombia"s peso rose 0.2%, extending gains into a third session after an interest rate hike by the central bank last week. The bank raised lending rates for the first time in a year as it seeks to control inflation. Rate hikes have been a common occurrence across the globe this year, with inflation rising on high commodity prices and easy monetary policy. Colombian stocks jumped 0.8% to an eight-month high. Brazilian stocks slipped more than 1%. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1239.08 -0.6 MSCI LatAm 2238.84 -1.01 Brazil Bovespa 111502.33 -1.24 Mexico IPC 51350.84 0.57 Chile IPSA 4284.66 -0.97 Argentina MerVal - - Colombia COLCAP 1382.58 0.9 Currencies Latest Daily % change Brazil real 5.4137 -0.83 Mexico peso 20.5514 -0.60 Chile peso 805.5 -0.31 Colombia peso 3781.15 0.17 Peru sol 4.121 0.08 Argentina peso 98.8800 -0.08 (interbank) (Reporting by Ambar Warrick Editing by Mark Heinrich) Our Standards: The Thomson Reuters Trust Principles.