EMERGING MARKETS-Latam assets set for weekly gains; investors parse data, corporate results

By Pranav Kashyap

April 25 (Reuters) - An index tracking Latin American stocks was on track to log its biggest one-week jump in more than two years, on expectations of a possible thaw in a trade war between the U.S. and China, while investors assessed data and corporate earnings across the region.

The MSCI gauge for Latin American stocks .MILA00000PUS was flat on Friday, as investors paused after a rally earlier in the week which put the index on track for its largest weekly gain since December 2022.

Investor sentiment showed signs of improving after reports on trade deal talks between Beijing and Washington. Data from Citigroup showed emerging markets funds posted inflows of $1.1 billion this week, with those into China alone standing at $1.3 billion.

"Progress is slow and remains fragile, but it seems there is a possibility that the worst will be avoided," analysts at Societe Generale said in a note.

Earlier in the day, China exempted certain U.S. imports from its towering 125% tariffs and invited businesses to propose more goods that they want to receive relief on, according to businesses notified.

Separately, U.S. President Donald Trump told TIME magazine in an interview that U.S.-China talks were taking place on tariffs. Beijing has so far disputed the U.S. characterization of talks.

Investors are concerned that an impasse between the world's two biggest economies could weigh on global growth as reflected by officials from the International Monetary Fund and the World Bank throughout the week.

Mexico's benchmark index .MXX inched up 0.1% and was on track for its biggest weekly rise since January 2023 of more than 6% - the most among regional peers as investors focused on corporate earnings. The country's assets have also benefited from stabilizing relations with its northern neighbor.

Grupo Mexico GMEXICOB.MX lost 0.8%. The mining and transport conglomerate reported a 17% increase in its net profit during the first quarter.

The peso MXN= was flat but is set to mark a third consecutive week of gains. Data showed the Mexican economy grew 1% in February on a monthly basis, at a time when markets anticipate the Banxico will continue cutting interest rates.

More broadly, a Latam currencies gauge .MILA00000CUS was on course for its strongest weekly performance since August 2024, but was flat during the session, reflecting persisting caution.

Resources-rich Latin American economies are dependent on revenues from commodities exports, demand for which could take a hit in a global recession environment.

Brazil's Bovespa index .BVSP dipped 0.2%, with miner Vale VALE3.SA falling 1.9% after reporting a decline in its first-quarter net profit.

Brazilian funds witnessed $400 million worth of outflows this week - their largest outflows in about a year, according to Citigroup.

On Friday, the real BRL= was muted and on track for its second-straight week in advances.

Data showed annual inflation sped up in line with market expectations in early April, stoking expectations that the domestic central bank will hike interest rates.

Chile's peso CLP= slipped 0.4% ahead of a credit rating review by Moody's.

Argentina's peso ARS=RASL slipped by 0.4%, on course for a second week of decline following the central bank's recent decision to allow it to trade within a controlled range.

A broader emerging market equity index .MSCIEF has recovered all its losses incurred since Trump unveiled steep duties on world economies earlier this month.

Elsewhere, Sri Lankan bonds XS2966242096=TE, XS2966242179=TE, XS2966241361=TE gained more than 1 cent each after the IMF said it reached a reached a staff-level agreement with island nation.

Key Latin American stock indexes and currencies at 1415 GMT: