EMERGING MARKETS-LatAm equities edge higher in calm session; Argentina leads

By Niket Nishant

Dec 24 (Reuters) - Latin American stocks climbed on Wednesday, with Argentina leading gains during a thinly traded session and keeping the region on course for its best year since 2009.

The MSCI index of equities .MILA00000PUS rose 0.3%, while Argentina's Merval index .MERV gained 0.6%.

Brazil's equity market was shut, while bourses in Argentina, Peru and Chile were scheduled to close early. Regional markets will be closed on December 25 for the Christmas holiday.

Mexican equities .MXX were down 0.5%, after the national statistics agency said that the seasonally adjusted unemployment rate was 2.7% in November.

With few other catalysts, investors revisited existing data and took their cue from the Federal Reserve, which is expected to lower interest rates next year.

Such rate reductions typically weaken the appeal of the U.S. dollar and boost demand for higher-yielding alternatives in emerging markets.

MSCI's currency gauge .MILA00000CUS was up 0.3%, with the Colombian peso COP= up 0.8% against the dollar.

EMERGING MARKETS SHINE IN 2025

Latin America has emerged as a bright spot in the broader emerging market universe this year, with investors looking to add exposure to the region.

Efforts to shore up public finances have helped bolster confidence, particularly at a time when trade policy uncertainty has eroded the appeal of developed markets.

The MSCI index of Latin American stocks has gained 46% so far this year, as of Tuesday's close, which puts it on pace for its best year since 2009.

However, domestic politics could throw a spanner in the works, especially as several countries in the region head toward elections.

In recent weeks, investors have had to contend with increasing tensions between the U.S. and Venezuela.

Some have tried to find opportunity amid the turmoil. Bets that increasing U.S. pressure on Venezuelan President Nicolas Maduro could pave the way for political change and a restructuring of Venezuela's debt have led to a rally in the country's bonds, which have returned roughly 100% at the index level in 2025.

However, analysts cautioned that the optimism may be premature.

"We think any hopes of a swift and clean, investor-friendly regime change are overdone. The ousting of Maduro doesn’t guarantee a smooth and orderly transition to a more democratic and investor-friendly government," said Stuart Culverhouse, chief economist and global head of fixed income research at Tellimer Research.

Key Latin American stock indexes and currencies: