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LatAm FX down 0.2%, stocks up 0.3%

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Argentine peso firms after six sessions of losses, stocks

steady

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Russia holds nuclear drills, some Ukrainian bonds fall

(Updates with afternoon trading)

By Niket Nishant, Johann M Cherian and Purvi Agarwal

Oct 22 (Reuters) - Latin American currencies dipped on

Wednesday and stocks inched higher as investor sentiment

remained steady for the region's assets, while the Argentine

peso showed some signs of stabilizing following six sessions of

losses.

MSCI's index for regional equities gained

0.3%, while the currencies index slipped 0.2%

even as the dollar index's rally paused.

Investor confidence in Latin America has held firm despite

the delicate balance between global interest rate expectations

and local geopolitical pressures that the region is navigating.

Analysts also expect carry trades to help emerging market

currencies regain momentum, as expectations of the U.S. Federal

Reserve easing interest rates amplify.

"LatAM is still one of the best performing areas of the

world year-to-date, but there is a lot of volatility in terms of

macro and political issues that can shape investor views," said

Gerardo Zamorano, director, investments group, Brandes

Investment Partners.

The spotlight will remain on Argentina heading into the

crucial mid-term elections as U.S. President Donald Trump has

threatened to pull monetary support if President Javier Milei's

party underperforms in Sunday's election.

Argentina's central bank signed a $20 billion currency

swap agreement with the U.S. Treasury earlier this week. The

support

prevented

a downgrade of Argentina's credit ratings, Fitch Ratings

said.

The local peso firmed 0.1% after hitting

record lows against the dollar in the previous two sessions. The

central bank sold $45.5 million from its reserves to support the

exchange rate. Local stocks gained 0.3%.

"If the elections support the ongoing restructuring of the

economy and that results in a more standard exchange rate

regime, it would free one of the obstacles we see for greater

interest in Argentina," said Zamorano.

Peru's stocks were little changed, a day

after marking their steepest intraday percentage decline since

April. President Jose Jeri declared a 30-day state of emergency

in Lima and the neighboring province of Callao, saying the move

was to battle rising crime.

The Colombian peso fell 0.3%. Stocks crept

0.6% higher following a two-day slide, and as oil prices gained

over 2%.

The country has drawn attention following a tariff and

drug-related spat between President Gustavo Petro and Trump.

Tariffs and trade talks remained in focus across the region.

Trump will meet Brazil's President Luiz Inacio Lula da Silva in

Malaysia on Sunday, Brazilian newspaper O Globo reported,

following a meeting between officials last week.

The Ibovespa index advanced 0.5%, buoyed by miner

Vale's shares after its production data and an uptick

in iron ore futures in China, while electrical equipment company

WEG gained following quarterly results.

Chile's peso was an outlier, up 0.4%, tracking higher

copper prices.

Elsewhere, Senegal's international sovereign government

bonds fell by more than 2 cents as investors reacted to an

upward revision in debt servicing figures.

Some of Ukraine bonds maturing in 2030, 2034 and 2035

weakened after Russia said it had carried out a major training

exercise involving nuclear weapons, a day after a planned summit

between Trump and President Vladimir Putin to discuss the

Ukraine war was put on hold.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

MSCI Emerging Markets 1379.8 -0.28

MSCI LatAm 2491.09 0.30

Brazil Bovespa 144867.51 0.54

Mexico IPC 61245.71 0.78

Chile IPSA 9050.99 -0.7

Argentina Merval 2009291.5 0.32

1

Colombia COLCAP 1899.36 0.57

Brazil real 5.3985 -0.2

Mexico peso 18.4386 -0.04

Chile peso 949.9 0.39

Colombia peso 3899.5 -0.26

Peru sol 3.406 -0.49

Argentina peso (interbank) 1488

0.13

Argentina peso (parallel) 1530 -0.33