EMERGING MARKETS-Latam stocks rise as U.S.-China trade tensions look to ease, currencies slip

By Pranav Kashyap, Johann M Cherian and Nikhil Sharma

April 23 (Reuters) - Most Latin American stocks rose on Wednesday, mirroring an upbeat global market sentiment as investors were relieved by signs of potential de-escalation in the U.S.-China trade dispute, though a firmer dollar weighed on currencies.

U.S. Treasury Secretary Scott Bessent said that high tariffs between the United States and China are not sustainable, as President Donald Trump's administration signaled openness to de-escalating a trade war between the world's two largest economies that has raised fears of recession.

That followed a Wall Street Journal report suggesting U.S. could lower levies on China to between 50% and 65% in a bid to de-escalate tensions.

Since his inauguration in January, Trump has ramped up levies on Chinese imports to 145%, to which Beijing has slapped trade duties of 125% on imports from the U.S.

"There have been headlines about potential de-escalation of tariffs on China, so the risk environment has improved, and with that, you see appreciation of Latam (assets)," said Alejandro Cuadrado, managing director and Latin America strategist at BBVA.

BBVA's Cuadrado, however, pointed out concerns about the reliability of this de-escalation which may "limit the capacity of Latam to value".

Further aiding gains, Trump said he had no plans to dismiss Federal Reserve Chair Jerome Powell following a series of criticisms over Powell's refusal to cut interest rates.

MSCI's index for Latin American stocks .MILA00000PUS soared 1.9%, its highest since November 7, while currencies .MILA00000CUS edged 0.5% higher after briefly hitting a near eleven-month high earlier in the session.

Most currency pairs though trended lower, with Mexico's peso MXN=, Colombia's peso MXN= and the Peruvian sol PEN= all nursing mild losses. The dollar index =USD meanwhile, was last up 0.4%.

Chile's main stock index .SPIPSA gained 1.1%, while Peruvian equities .SPBLPGPT gained 1%. The Chilean government maintained its projection for 2025 GDP growth at 2.5% amid global uncertainty.

Brazil's real BRL= edged 0.1% higher against the dollar. The local Bovespa index .BVSP added 1.6%, boosted by a 1.2% rise in mining giant Vale VALE3.SA.

The country's Finance Minister Fernando Haddad upheld a 2.5% growth forecast for the nation's economy this year.

Brazil's central bank perceives the recent moderation in economic activity as a testament to the effectiveness of its tight monetary policy, monetary policy director Nilton David said.

The World Bank on Wednesday slashed its 2025 economic growth forecast for Latin America, citing global uncertainties.

Brazil's growth outlook was cut to 1.8% from 2.2%, while Mexico's economy is projected to have no growth this year, compared to the previously forecast 1.5% expansion.

In Mexico, a poll showed annual inflation likely slowed in the first half of April, lifting the chances that the central bank will again cut interest rates in May.

Argentina's peso ARS=RASL lost 5%, the worst-performing currency for the day, reflecting ongoing volatility since the government lifted longstanding currency controls earlier this month.

Among individual stocks, Banorte GFNORTEO.MX rose 2.7% following first-quarter results. CEO Marcos Ramirez said the bank will again consider a potential purchase of Banamex.

Brazil's JBS SA JBSS3.SA climbed 6.8% as the world's largest meatpacker advanced its U.S.-listing plan.

Key Latin American stock indexes and currencies: