* Brazilian inflation jumps to 1.60% in October * Chilean copper exports surge in Oct * Lender Itau Unibanco receives approval to buy stake in XP Inc (Adds details, updates prices) By Shashank Nayar and Ambar Warrick Nov 8 (Reuters) - Brazil"s real dropped on Monday as investors feared that rising inflation will dampen the pace of economic recovery, while Chile"s peso led gains in Latin America on strong copper export data. The Brazilian real fell about 0.5% after data showed inflation as measured by the IGP-DI price index rose 1.60% in October, compared with a 0.55% gain in September. The figure adds to growing concerns over higher prices in the country, which has seen the central bank hike interest rates by an aggressive 575 basis points this year, with more to come. Analysts warn this could choke economic growth. "These figures imply lower inflationary pressures coming from food components in the very short term, but higher pressures coming from oil-related prices and in the medium and long term, higher iron ore prices should pressure industrial components for longer," analysts at Citi wrote in a note. Sao Paulo-listed stocks fell 0.2% as gains in commodity-linked stocks were offset by weak financials. Lender Itau Unibanco said it had received central bank approval to buy an 11.38% stake in brokerage XP Inc, but its shares slipped along with other banks. The currency of the world"s top copper exporter Chile jumped 1.2% after its central bank said revenues from copper exports amounted to $4.481 billion in October, up 23% from a year earlier, helped by high global prices. As pollsters go into a legal blackout period two weeks before the Nov. 21 election, Chile"s right-wing presidential front-runner Jose Antonio Kast has retained his grip on first place in pre-election opinion polls, ahead of leftist Gabriel Boric. Other Latam currencies, including the Mexican and Argentine pesos, fell, with eyes on inflation data this week. Similar data from the United States is also being watched and is likely to fuel speculation about the next monetary policy steps by the Federal Reserve. Mexico and Peru"s central banks are expected to raise rates this week to stave off inflation. The International Monetary Fund last week highlighted the risks from rising inflation in Mexico. In Argentina, ruling Peronists are likely to suffer a major blow in midterm legislative elections, polls ahead of the Nov. 14 vote show. Argentine stocks jumped 2.4% to a record high. Key Latin American stock indexes and currencies: Latest Daily % change MSCI Emerging Markets 1269.23 0.41 MSCI LatAm 2157.92 0.16 Brazil Bovespa 104652.41 -0.16 Mexico IPC 52050.19 0.14 Chile IPSA 4373.98 -0.32 Argentina MerVal 95121.16 2.395 Colombia COLCAP 1391.67 0.22 Currencies Latest Daily % change Brazil real 5.5474 -0.46 Mexico peso 20.2990 0.09 Chile peso 801.7 1.17 Colombia peso 3870.13 0.00 Peru sol 4.0059 -0.09 Argentina peso 100.0500 -0.10 (interbank) (Reporting by Shashank Nayar in Bengaluru; Editing by Jonathan Oatis and Jan Harvey)