By Aaron Saldanha
May 24 (Reuters) - An index of Latin American stocks marked time on Friday, on course to post a solid weekly gain, as did Latin American currencies, which held ground against the dollar.
Investor sentiment towards the region has been marred this week by a worsening of U.S.-China trade ties amid Alphabet Inc's GOOG.O Google suspending some business with Chinese telecom giant Huawei Technologies Co Ltd early this week.
China's economy - the world's second largest - influences Latin American markets as its factories buy a large portion of the continent's resources exports.
Markets were set to end the week in positive territory on hopes U.S.-China trade talks will resume, Banorte Research Chief Economist and Head of Research Gabriel Casillas wrote in a note, citing U.S. President Donald Trump hinting on Thursday Huawei could be included in some form of a trade deal.
MSCI's index of Latin American stocks .MILA00000PUS was flat, but on track to post a 2.5% weekly gain, its first weekly rise since April. MSCI's Latin American currencies index .MILA00000CUS was set to add 0.6% for the week.
Brazil's real BRL= edged firmer, while Sao Paulo-traded stocks .BVSP tacked on 0.4%, supported by gains among materials and energy stocks.
State-run oil firm Petroleo Brasileiro SA (Petrobras) saw its common shares PETR3.SA and preferred shares PETR4.SA rise 0.7% and 1.1% , respectively, as Brent crude futures LCOc1 started their recovery following Thursday's 4.6% drubbing. O/R
Vale SA VALE3.SA rose 2.8%, after Bank of America Merrill Lynch boosted its rating and price target on the miner's U.S.-listed shares VALE.N to "Buy."
Mexican stocks .MXX slid 0.4%, while the peso MXN= softened 0.1%.
Latin America's second-largest economy contracted in 2019's first quarter, from the previous three-month period, in a blow to the new government's drive to convince investors it can boost growth.
International investor sentiment toward Mexico has softened of late. U.S.-domiciled investors have yanked about $262 million in total from a commonly traded Mexico-focused equity ETF EWW.N over the three weeks ended Wednesday, Lipper estimates show.
Chile's peso CLP= rose 0.4%, supported by a gain in the price of copper CMCU3, the country's top export and a commodity which is greatly exposed to slowing Chinese growth. MET/L
Argentina's stocks .MERV rose 0.5%, while the peso ARS= firmed marginally.
Colombia's peso COP= firmed 0.7%, while local stocks .IGBC tacked on 0.6%, with oil firm Ecopetrol SA ECO.CN up 0.3% on firmer oil prices LCOc1. O/R
Latin American stock indexes and currencies at 1437 GMT
daily % change
MSCI Emerging Markets .MSCIEF
MSCI LatAm .MILA00000PUS
Brazil Bovespa .BVSP
Mexico IPC .MXX
Chile IPSA .SPCLXIPSA
Argentina MerVal .MERV
Colombia IGBC .IGBC
daily % change
Brazil real BRBY
Mexico peso MXNUSD=R
Chile peso CLP=CL
Colombia peso COP=
Peru sol PEN=PE
Argentina peso (interbank) ARS=RASL
(Reporting by Aaron Saldanha in Bengaluru; Editing by Andrea Ricci)
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