Jan 17 (Reuters) - Russia's rouble turned to losses on Monday amid rising geopolitical tensions, while upbeat economic data from Brazil saw the country's currency outperform Latin American peers.

The rouble fell 0.4% to 76.57 per dollar after having gained as much as 0.7% earlier in the day.

German Foreign Minister Annalena Baerbock said on Monday that she hoped mounting tensions with Russia over Ukraine could be solved by diplomacy, but she warned that Moscow would suffer if it does attack the country.

Talks between Moscow and Western states on Russia's deployment of tens of thousands of troops along Ukraine's border ended with no breakthrough last week. A cyber attack against Ukraine has further inflamed tensions.

Yields on Russia's 10-year benchmark OFZ government bonds stayed close to their highest since early 2016 hit on Friday . Ukraine's dollar-denominated sovereign bonds also fell and both countries' default insurance costs jumped.

"Geopolitical wobbles are shaking (Commonwealth of Independent States) assets. As a result, both Ukrainian and Russian lines cheapened versus their ratings. It seems that rhetoric will continue to be the made driver of yields for the time being," said EM strategists at TD Securities.

In China's troubled property sector, the biggest homebuilder by sales, Country Garden, saw its bonds slump again up to 17 points, leaving most of its international market debt at 25%-35% below its face value., ,

In Latin America, Brazil's real firmed as much as 0.6% to hit two-month highs after economic activity rose a seasonally adjusted 0.69% in November following four months of consecutive drops and marking the strongest monthly print since February.

Still, prospects for the final quarter are weak, with double-digit inflation weighing on consumption and investment decisions.

Most other regional currencies fell against a stronger dollar.

Stocks in Latam fell, in thin trade owing to a holiday in the United States, with Brazil's Bovespa retreating from near one-month high.

Brazil's Aliansce Sonae said on Monday it will keep pushing for a merger with shopping mall operator BR Malls even after the rival turned down its offer last week. BR's shares gave up early gains to trade 0.6% lower.

Brazilian petrochemical producer Braskem slipped almost 2% after it filed with the Securities and Exchange Commission on Friday for a share offering in which Petrobras and Novonor will sell their stakes in the petrochemical company.

(Reporting by Susan Mathew in Bengaluru; Editing by Frank Jack Daniel)