By Carla Mozee

Major Latin American equity markets gained ground Monday, with Brazil's top stocks fending off an earlier decline as prices for commodities-related stocks improved.

Brazil's closely watched Bovespa index rose 0.3% to 49,389, in part as steel stocks came off of session lows.

CSN (SID) slipped 0.4%, Gerdau (GGB) fell 1.2% and Usiminas slumped 4.6%.

Shares of Vale (RIO) rebounded to notch a rise of 0.7%. Unionized workers at Vale nickel operations in Ontario, Canada, staged a strike after rejecting a proposed renewal of their labor contract. Vale had already shut operations at its mine in Sudbury through the end of the month.

Shares of Petrobras (PBR) shed 0.1% as oil prices fell 2% to below $59 a barrel, extending their 10% drop in the previous week on persistent concerns about weak demand amid soft economic conditions.

Citigroup added Petrobras to its focus regional focus list. It also added discount retailer Lojas Americanas and telecom firm Oi (TNE).

Analysts Geoffrey Dennis and Jason Press also said a "correction" in regional stock markets has reached its expected range for a decline of 10% to 15% in the MSCI Latin America index.

"Although the mood has turned sour on worries over the timing of economic recovery, we see little more downside from here and expect regional markets to break out to the upside again later this summer," the analysts wrote in a note to clients.

The move higher in the markets should depend on confirmation of recovery in the U.S. and a bottoming out of corporate earnings in Latin America. Citigroup currently expects U.S. economic activity to return to growth in the third quarter.

Citigroup dropped Brazilian air carrier TAM (TAM) from its focus list. The shares, however, rose 2.5% and rival Gol (GOL) rose 0.8% as oil prices tumbled.

Lojas Americanas shares lost 0.8%, and Oi fell 2%.

Mexico's IPC rose 0.6% to 23,791, aided by a 4.2% rise in shares of Kimberly-Clark de Mexico (KCDMY) after they reportedly were upgraded to buy from hold by Citigroup's Banamex unit, citing expectations that the consumer products maker will post better-than-expected quarterly earnings.

But shares of micolender Banco Compartamos fell 1.9% after reportedly being downgraded to sell from buy by Banamex, citing valuation concerns.

Shares of market heavyweight America Movil (AMX) picked up 0.1% and shares of Cemex (CX) rose 1%.

Argentina's Merval climbed 3.9%. Shares of steel tube maker Tenaris (TS) bounced 5.7% higher and shares of Petrobras Energia (PZE) rose 2.6%. Trading was closed in Argentina on Thursday for a holiday and on Friday as part of an effort by country officials to stem the spread of the H1N1 virus.

Chile's IPSA rose 1.3% to 3,121 as shares of SQM (SQM) rose 3% and retailer Falabella gained 4.4%.