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MSCI Latam FX off 0.3%, stocks decline 0.4%

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Bank of Mexico holds rates

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Moody's cuts credit rating on Indonesia

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Brazil's Itau Unibanco estimates up to 9.5% loan book

growth

(Updates to mid-session trading)

By Purvi Agarwal and Ragini Mathur

Feb 5 (Reuters) - Latin American currencies weakened

broadly against the dollar on Thursday as a sharp selloff in

technology stocks and precious metals sent shockwaves through

global markets, dampening investor appetite for emerging market

equities.

The commodity-driven ‌decline hit resource-rich economies

particularly hard. Colombian stocks fell 1.8%,

tracking oil's 2% plunge, while Chilean equities -

sensitive to copper prices as the world's largest exporter -

dropped 1.5% after the ​red metal retreated alongside precious

metals.

Gold prices slid and silver sank over 11% as investors

booked profits after a two-session ‍rally, extending the whiplash

in commodity markets that has largely impacted resource-rich

emerging markets.

An ongoing ⁠sell-off in technology stocks also ⁠injected fresh

volatility in equity markets.

"It's been a tough week for investors who were heavily

exposed to the parts of the market that led the upside.

Technology ‌and AI, but more recently we've also seen gold and

precious ​metals sell off," said Mona Mahajan, principal head of

investment strategy and asset allocation at Edward Jones.

"Investors need to be more thoughtful in diversification.

Emerging markets and international equities have held up better

and ⁠we see opportunity out there, but it's a diversified

opportunity ‍set."

BANXICO HOLDS STEADY

Mexico's ​stocks and currency were down 0.3% each

after the country's central bank held its benchmark interest

rate at 7% in a unanimous decision.

The Banxico verdict was in line with expectations amid

recent upticks in both inflation ‍and economic growth.

Liam Peach, senior emerging markets economist at Capital

Economics, said the meeting was "slightly more hawkish overall",

noting the timing of the next rate move may hinge on inflation

improvements.

In a rare bright spot, Brazilian stocks gained 0.9%,

largely buoyed by a 2.3% gain in Itau Unibanco after

the lender estimated on Wednesday that its loan book will grow

by up to 9.5% this year, as it posted a fourth-quarter recurring

profit.

The gains limited overall losses at 0.4% on MSCI's index

tracking Latin ​American stocks.

CURRENCIES ‍DIP

On the FX front, most currencies weakened against the

greenback, partly aided by the dip in commodity prices.

Colombia's peso dipped 0.7%. The country's central

bank head Leonardo Villar said the sharp 100-basis-point

interest rate jump in ​Colombia last month is still not enough to

maintain a contractionary monetary policy stance.

Chile's peso depreciated 0.7%.

Brazil's real was down 0.2%, bringing the MSCI

measure of regional currencies down 0.3%.

Argentina's peso bucked the trend, gaining 0.4%.

Argentina and the U.S. signed an agreement on critical minerals

on Wednesday to strengthen and secure supply chains, amid a U.S.

push for a preferential trade bloc for critical minerals.

Beyond Latin America, the Czech central bank held interest

rates steady, as expected, despite a drop in inflation to a

nine-year low and indications that policymakers ​might consider

further easing.

Moody's cut Indonesia's credit rating outlook to negative

from stable, citing reduced predictability in policymaking days

after MSCI flagged transparency issues that triggered a market

rout of more than $80 billion.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1509.42 -1.52

MSCI LatAm 3121.79 -0.36

Brazil Bovespa 183284.86 0.87

Mexico IPC 68548.32 -0.27

Chile IPSA 11250.6 -1.53

Argentina MerVal 2944787.83 -2.36

Colombia COLCAP 2338 -1.81

Currencies Latest Daily % change

Brazil real 5.2502 -0.21

Mexico ‍peso 17.384 -0.28

Chile peso 867.35 -0.67

Colombia peso 3695.5 -1.47

Peru sol 3.3662 -0.18

Argentina peso (interbank) 1,442.0 0.41

Argentina peso (parallel) 1,420.0 2.41