(Adds analyst comment)

*

LatAm stocks down 0.43%, FX down 0.1%

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Brazil's services activity grows 0.6% in September

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South Africa's inflation target lowered to 3% in mid-term

budget

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Romanian central bank holds benchmark interest rate at

6.50%

By Nikhil Sharma

Nov 12 (Reuters) - Latin American stocks and currencies

were mixed on Wednesday as investors paused after days of gains

on the back of progress towards an end to the historic U.S.

government shutdown.

MSCI's index for Latin American equities was

down 0.43% after it climbed 2.2% in the prior session, while a

parallel gauge for currencies slipped about 0.2%

- set to snap five-day winning streak.

Equities around the globe maintained with their upward

momentum, with MSCI's broadest index of Asia-Pacific shares

outside Japan rising 0.4% on Wednesday.

Members of the House of Representatives headed back to

Washington on Tuesday, after a 53-day break, for a vote that

restore federal government funding and bring the longest U.S.

shutdown in history to a close.

In Latin America, Brazil's main Bovespa index fell

0.43% after 14 straight days of gains - a run last seen in May

1994. For the year, the index is up over 31%, outpacing 16.6%

rise Wall Street's S&P 500 index, highlighting investors hunt

for emerging markets offering lower valuations, higher yields,

and solid growth prospects after periods of underperformance.

The Brazilian currency real was up 14.2%

year-to-date, with near two-decade-high borrowing costs making

it an attractive currency for carry trades.

Broader emerging markets showed similar outperformance, UBS

Global Research said, but it expects slower returns in 2026 as

U.S. rate cuts are largely priced in and the dollar is unlikely

to spark another major rotation into emerging economies.

However, UBS noted that easing inflation, attractive

valuations - particularly in China amid supportive flows - and

potential reforms as several countries head to the polls are

creating opportunities across EM. It remains bullish on Brazil,

anticipating stronger growth around the 2026 election.

"We've got fiscal expansion in China and in Europe, so

recovery of demand in both those places will tend to favour a

slightly weaker dollar which will be good for emerging markets

generally and especially good for LatAm," said Jon Harrison,

managing director of EM Macro Strategy.

Meanwhile, the real was down about 0.5% for the day, dragged

by lower oil prices. Data showed services activity in Brazil

grew more than expected 4.1% in September on a year-on-year

basis.

The Chilean peso rose 0.33% and the Santiago stock

index jumped 1.8% to a fresh record high, thanks to

higher copper prices. Investors braced for the first round of

presidential elections later in the weekend, with polls

indicating a lead for Communist Party's Jeannette Jara in a

close contest.

Chile's central bank board on Tuesday unanimously maintained

the countercyclical capital buffer at 0.5% of risk-weighted

assets, citing global financial risks.

In Argentina, local peso jumped 1.4% and the

benchmark stock index rose 0.75% ahead of a pivotal

inflation data at 2:00 p.m. ET, expected to show annual

inflation rate hitting a six-year low.

In other EM territories, the South African rand

strengthened 0.4% after the finance minister announced a lower

inflation target in the mid-year budget review. The country's

international bonds advanced, with the 2046 maturity

gaining 1.2 cents on the dollar.

Romania's central bank held its benchmark rate at 6.50% as

expected, warning inflation will not reach the target until the

first quarter of 2027, later than earlier projections.

Romanian currency leu was subdued, while Bucharest

stocks jumped 0.6% to hit an all-time high.

Hungarian bond yields rose as market unrest grew after the

government on Tuesday raised its deficit targets for 2025 and

2026. The 10-year benchmark bond yield jumped 11 basis points to

a 2-month high of 7.07% according to data from the Government

Debt Management Agency.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1407.11 0.32

MSCI LatAm 2707.07 -0.43

Brazil Bovespa 156969.21 -0.49

Mexico IPC 64097.03 -0.35

Chile IPSA 9890.06 1.85

Argentina MerVal 2980566.22 0.75

Colombia COLCAP 2080.77 -0.05

Currencies Latest Daily % change

Brazil real 5.2966 -0.47

Mexico peso 18.2937 0.15

Chile peso 930.77 0.33

Colombia peso 3721.9 0.26

Peru sol 3.3656 -0.02

Argentina peso (interbank) 1,395.0 1.41

Argentina peso (parallel) 1,420.0 1.39