EMERGING MARKETS-Brazil, Mexican equities lead Latam stocks higher after cooler inflation data

By Niket Nishant and Twesha Dikshit

Dec 23 (Reuters) - Latin American stocks advanced on Tuesday, with Brazilian and Mexican equities leading gains after mild inflation data, even as currencies remained trapped within tight ranges following the U.S. GDP data.

The MSCI index that tracks equities .MILA00000PUS rose 1.2%, with Brazil's Bovespa .BVSP leading with a 1.4% gain.

Consumer prices in Latin America's largest economy rose 4.41% in the 12 months through mid-December, slower than the 4.43% figure economists polled by Reuters had expected.

Meanwhile, Mexican equities .MXX rose almost 1% to hit a record high and were headed for their fourth straight day of gains. The annual inflation rate hit 3.72% in the first half of December, below estimates of 3.85%, data showed.

The inflation prints could strengthen the case for Latin American stocks as a bright spot among emerging markets, especially as investors hunt for alternatives to premium-valued U.S. equities.

"The calm of current markets has led to gains in carry trades, again led by Mexico and Colombia, but this will be tested by the key U.S. economic data ahead, from GDP to durable goods," said Bob Savage, head of markets macro strategy at BNY in a note.

CHILE STOCKS STEADY

In Chile, the benchmark index .SPIPSA ticked up 0.1%. Investors are keeping a keen eye on the country after it elected right-wing candidate Jose Antonio Kast as its president earlier this month.

"Kast will enter office with a slew of economic pressures in his inbox: slow growth, weak investment, stagnant productivity, high inequality, limited social mobility and regional gaps," strategists at think tank Atlantic Council said.

Peru's stock benchmark .MXNUAMPESCPGPE scaled a fresh record high, up 0.7% as metals including gold and copper hit fresh peaks. Copper and gold are two of Peru's top exports.

Argentina's government posted a current account deficit of $1.58 billion for the quarter, compared to a surplus of $891 million a year earlier, according to official data.

Argentine stocks .MERV dropped 0.7%, while the peso ARS= ticked up.

Colombia's Colcap Index .COLCAP rose 0.5% while the peso COP= added 0.8%. Domestic data showed the country's October imports rose 15.85% to $6.214 billion year-on-year.

CURRENCIES UNDER PRESSURE

MSCI's currency gauge .MILA00000CUS was flat, with the dollar paring losses after data showed that the U.S. economy grew faster than expected in the third quarter, driven by robust consumer spending.

Reduced odds of a rate cut by the Federal Reserve keep dollar losses in check and limit demand for high-yielding emerging market currencies.

Investors are also contending with potential for escalated tensions between the U.S. and Venezuela after President Donald Trump said on Monday it would be "smart" for Venezuelan President Nicolas Maduro to leave power.

Key Latin American stock indexes and currencies at 19:43 GMT: