EMERGING MARKETS-LatAm assets head for solid weekly finish despite global market gloom

By Nikhil Sharma and Sukriti Gupta

Nov 7 (Reuters) - Latin American assets were on track for a strong weekly run, defying a global risk-averse trend, as investors evaluated key monetary policy decisions and inflation data from the region.

A broader gauge for LatAm equities .MILA00000PUS was up 0.7% on Friday and 2.3% for the week so far. In contrast, Wall Street equities were set for a dull weekly finish on concerns about the economy and stretched valuations.

An index tracking regional currencies .MILA00000CUS added 0.4%, taking weekly gains to 0.9% so far.

"From a bigger picture trend, what we're seeing is people (are) noticing the carry trade in Latin America in combination with improvements in political trends," said Malcolm Dorson, head of emerging markets at Global X ETFs.

In Brazil, the real BRL= was up 0.7% for the week, set for its fourth straight weekly gain, supported by the central bank's decision to keep interest rates on hold and hawkish guidance of more such pauses despite the government's calls to bring down borrowing costs.

Sao Paulo's main stock index .BVSP edged up 0.1%, set to register its 13th straight session of gains. For the week, the index was up 2.7%.

The IGP-DI price index, Brazil's key inflation metric, showed price pressures fell marginally in October, marking a smaller decline than market participants expected.

In Mexico, annual inflation decelerated in October but remained within the central bank's target range of 3%, plus or minus a percentage point.

The data followed the central bank's decision on Thursday to lower borrowing costs for the fourth consecutive time to tame sticky core inflation, while adopting a cautious tone on further easing prospects.

"Unless the economy shows signs of improvement or the peso comes under significant pressure, inflation risks are less likely to materialize," analysts at Societe Generale said in a note, adding that the bank could ease further, but the timing may become more sporadic.

The Mexican peso MXN= added 0.6% and was up 0.4% for the week. Its main stock index .MXX added 0.3% to take its weekly gain to 0.9%.

The Colombian peso COP= was among the top-performing currencies for the week, up 2.6%, as it continued to benefit from the central bank's decision last week to pause the key rate at 9.25%, amid inflation-related uncertainties.

The bank revised upward its inflation predictions for this year and for 2026 in its quarterly monetary policy report on Wednesday. Colombia's main stock index .COLCAP has gained 4.3% this week.

Focus was also on Chile's upcoming presidential election just over a week away. The ruling leftist coalition's candidate, Jeannette Jara, is seen leading polls over hard-right rivals Jose Antonio Kast and Evelyn Matthei.

The local peso CLP= fell 0.4% after annual inflation slowed in October to return to the central bank's target range, igniting expectations for future cuts.

The Santiago stock index .SPIPSA jumped 1.5% as separate data showed a 13.5% annual increase in copper exports in October. Red metal exports account for significant income for the world's largest copper-producing nation.

In Argentina, the main stock index .MERV has fallen 4.6% so far this week, after surging a record 44.5% in the previous week, thanks to a decisive midterm election win for President Javier Milei's party.

The local peso ARS=RASL rose 2.4% on Friday.

Key Latin American stock indexes and currencies: