* Chile"s peso sole gainer in Latin America * Iron ore weakness sends Brazil"s real 1% lower * Brazil"s Lojas Americanas surges ~21% on merger talks (Updates prices, adds JPM comment) By Ambar Warrick and Susan Mathew Oct 18 (Reuters) - Most Latin American currencies fell on Monday as concerns over slowing Chinese economic growth and rising inflation rattled sentiment, with Brazil"s real falling the most as iron ore markets were dented by a coal shortage. The real dropped 1%, with coal shortages in China brewing concerns over demand for other steel-making materials including iron ore - a major export for Brazil. Data on Monday showed China"s economy grew at its slowest pace in a year, hit by a power crunch and a faltering property sector. "The expected economic slowdown in China creates additional risks for the Brazilian economy, whose dependence on China has skyrocketed in recent years and continues to grow," analysts at TS Lombard wrote in a note. Brazil"s Bovespa stock index, meanwhile, recouped session losses of as much as 1.6% thanks to a 21% surge in retailer Lojas Americanas after it said it was considering a full merger with peer Americanas. Americanas shares rallied 4.3%. Most other Latin American stocks exchanges rose, with Chile"s IPSA rising from 11-month lows. Mexico"s IPC index fell from seven-week highs to trade down 0.4%, led by media group Televisa. Concerns over China"s economic health hit broader Latin American (Latam) currencies as well, given the region"s high dependence on the Asian nation as an export destination. Expectations of rising inflation also weighed. Latam currencies "will be challenged on both sides of the dollar smile: a (Federal Reserve) that is kept hawkish due to high inflation versus Chinese/Covid growth risks," strategists at JPMorgan said. "Latam is the region with the most risk premia ahead," they said, pointing to upcoming elections in Brazil, Chile and Colombia and fiscal woes in most Latam countries. JPM sees Mexico"s peso prone to more weakness than regional peers and are "underweight" on the currency. On the day, Mexico"s peso dropped 0.2% despite rising oil prices, as weak global sentiment made investors avoid the currency for carry trade. Chile"s peso rose 0.7% and was the sole gainer in Latin America, benefiting from higher copper prices on signs of extremely tight supply in the London Metal Exchange (LME) system. Colombian markets were closed for a holiday. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1284.06 0.03 MSCI LatAm 2283.42 -0.57 Brazil Bovespa 114590.34 -0.05 Mexico IPC 52593.37 -0.39 Chile IPSA 4020.15 0.95 Argentina MerVal 83121.60 1.38 Currencies Latest Daily % change Brazil real 5.5050 -0.94 Mexico peso 20.3470 -0.09 Chile peso 817.5 0.72 Peru sol 3.9433 -0.56 Argentina peso 99.2700 -0.08 (interbank) (Reporting by Ambar Warrick Editing by Paul Simao and Cynthia Osterman) Our Standards: The Thomson Reuters Trust Principles.