(Updates with afternoon trading, adds market details)
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Stocks up 0.2%, currencies flat
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Chile set for presidential runoff on Sunday
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Mexican stocks lead gains
By Niket Nishant
Dec 12 (Reuters) - Latin American stocks rose on Friday, eyeing a positive finish to a week dominated by monetary policy decisions, including a U.S. Federal Reserve interest rate cut, while investors braced for Chile's weekend presidential runoff.
Equities in Chile, which is heading into the presidential runoff on Sunday, were poised to end the week with a gain of 1.7%. For the day, stocks were up 0.36%.
The peso edged 0.37% higher, extending its strong run. It was up 1.5% for the week so far.
Brazil's Bovespa index gained 0.7% and the real was largely unchanged. Both assets were on pace for strong weekly advances.
The country's central bank left interest rates at a near-two-decade high on Wednesday, while maintaining a hawkish tone even as economic activity slows.
Elevated rates tend to boost the appeal of local currencies, as foreign investors hunt for high-yielding alternatives to the dollar.
Peru's Lima Stock Exchange was 0.3% higher, while the currency sol was 0.1% stronger against the dollar, following the central bank's decision to hold its benchmark interest rate at 4.25% on Thursday.
GAUGE OF REGIONAL CURRENCIES FLAT
MSCI's index that tracks overall Latin American equities added 0.2% and was up 1.2% week-to-date, while a gauge of regional currencies was flat and stayed on pace for a benign weekly finish.
The weekly gains can largely be attributed to the much-anticipated Fed rate cut on Wednesday, accompanied by a policy outlook statement that was widely viewed as less hawkish.
The region is also on track for a strong finish to the year, in which assets have rallied despite political turbulence and trade tensions with Washington.
"Some of the tailwinds the region has yet to exploit will carry over into 2026," said Geronimo Mansutti, senior LatAm credit analyst at Tellimer Research.
"The region's poor track record still argues for caution. Investors may see reason for hope in right-wing governments that have, or are likely to, take office in the short term in several countries across the region."
In Argentina, the Merval index slipped 0.2% and the peso dipped 0.24%. On Thursday, President Javier Milei's office said he had submitted a labor reform proposal to Congress to tackle excessive bureaucracy and a "rigid structure" that has held back formal job creation.
Investors were also monitoring tensions between Washington and Caracas, after Reuters reported the U.S. is preparing to intercept more ships transporting Venezuelan oil following the seizure of a tanker this week.
Mexico's main stock index led gains on Friday, climbing 2% to an all-time high. A Reuters poll showed that the country's central bank is expected to lower its key interest rate to 7% at its meeting on December 18, making its 13th cut since February 2024.
Mexican stocks were also among the top performers for the week, up 2.1%. The peso added 0.2% and advanced 0.8% week-to-date.
Colombian President Gustavo Petro said the seizure amounted to "oil piracy," potentially escalating tensions with U.S. President Donald Trump, with whom he has repeatedly clashed this year.
Colombian equities flattened, while the peso slipped 0.13%.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily % change
MSCI Emerging Markets 1387.98 0.82
MSCI LatAm 2736.03 0.19
Brazil Bovespa 160310.19 0.7
Mexico IPC 64712.07 2.05
Chile IPSA 10400.01 0.36
Argentina MerVal 2975787.21 -0.16
Colombia COLCAP 2113.23 -0.05
Currencies Latest Daily % change
Brazil real 5.4109 -0.06
Mexico peso 18.0108 0.21
Chile peso 910 0.37
Colombia peso 3802.5 -0.13
Peru sol 3.3669 0.08
Argentina peso (interbank) 1,440.5 -0.24
Argentina peso (parallel) 1,425.0 1.72
(Reporting by Niket Nishant in Bengaluru
Editing by Rod Nickel)
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