*

MSCI EM stocks index logs biggest gain since September

*

China slaps tariffs on US, expands mineral export control

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MSCI Latam FX up 0.6%, stocks gain 1%

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Mexico implements measures to ensure stability of

financial

markets

(Updates to mid-session trading)

By Purvi Agarwal and Johann M Cherian

Feb 4 (Reuters) - Emerging market currencies rose

broadly and stocks were set for their biggest gains in months on

Tuesday, on relief after U.S. President Donald Trump temporarily

suspended tariffs on Mexico and Canada.

The global EM stocks measure was up 1.9%, logging

its biggest one-day jump since September 2024. MSCI's index

tracking Latin American currencies rose 0.6%,

while the stocks gauge advanced 1%.

All regional bourses were higher, with Argentina's Merval

up 1.8%, while Colombia's COLCAP gained 0.6%.

Trump relieved Mexico and Canada from tariffs for 30 days, as

the countries came to border security agreements. Most EM assets

recouped heavy declines from a volatile session on Monday,

including the Mexican peso that had hit its lowest in

nearly three years.

The currency was down 1% against the dollar ahead of a local

central bank monetary policy decision due later in the week.

Banxico is widely expected to lower benchmark interest rates by

50 basis points. Mexican stocks were 1.2% higher in their

first session of trading after the change in tariff policy.

"The saga is not over, of course, and could be revisited

again in early March, or when headlines emerge in the

intervening period," said Thierry Wizman, global FX & rates

strategist at Macquarie.

"But the U.S. administration's decision to delay U.S. import

tariffs on Mexico and Canada for 30 days supports our view that,

in the final analysis, it will be "concessions", and not

"tariffs" that will be the norm for U.S. allies."

Mexico's finance ministry said it was implementing measures to

guarantee the stability of financial markets following recent

volatility in its peso and local stock exchange.

China, however, could not escape the tariffs, and responded with

limited countermeasures on U.S. imports and an expansion on

control over mineral exports. Trump's call with the Chinese

president, expected "very soon" according to the White House,

will be awaited.

Still, Hong Kong stocks closed 2.8% higher.

Trump's threats of tariffs have kept EM investors on

tenterhooks and clouded the growth outlook for EM economies,

with many already grappling with fiscal concerns and prospects

of higher for longer interest rates in the U.S.

Some relief over tariffs also boosted copper prices, lifting

the Chilean peso to its highest since Dec. 10 and stocks

rose 0.9% in the world's largest copper producer.

The real was 0.6% higher, trading around levels last

seen in November and on track for its twelfth session of gains,

in its longest streak in 20 years.

In the minutes of its last meeting, Brazil's central bank

stressed that cooling economic activity is crucial for bringing

inflation to target, while flagging risks from inflation

expectations and an overheating economy.

Brazil's Bovespa index was the only outlier among

bourses, down 0.2%, weighed by a 0.6% decline in oil

heavy-weight Petrobras after it reported a decrease

in fourth-quarter production and lower sales and exports.

Brazil's sovereign bond rose 9.7 cents on the dollar

after the country's treasury estimated that federal public debt

will rise up to 16% this year.

10-year sovereign papers of Mexico, Colombia

and Chile added between 0.1 and 0.8

cent.

Key Latin American stock indexes and currencies at 1937 GMT:

Latin American market prices

from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1094.75 1.96

MSCI LatAm 2048.4 1.03

Brazil Bovespa 125446.37 -0.23

Mexico IPC 51838.08 1.23

Chile IPSA 7269.19 0.9

Argentina Merval 2528840.02 1.8

Colombia COLCAP 1514.42 0.64

Currencies Latest Daily %

change

Brazil real 5.7682 0.66

Mexico peso 20.5478 -1.07

Chile peso 971.9 1.27

Colombia peso 4162.5 -0.1

Peru sol 3.712 -0.19

Argentina peso (interbank) 1053.5 0.02

Argentina peso (parallel) 1195 2.05